Medicare and Medicaid: Obama vs. Ryan

04/11/2011 05:30 pm ET | Updated Jun 11, 2011

Rep. Paul Ryan, apparently with the full support of the Republican caucus in the House, has put forward a plan that clearly destroys both Medicare and Medicaid. He calls it "restructuring," but it is absolutely, undeniably clear that in this case that "restructuring" translates directly into ending the programs. It's not just the breathtakingly deep cuts -- $2.17 trillion in Medicaid over the next 10 years, $8.9 trillion in Medicare between now and 2050 -- but the fundamental changes involved. Medicare will no longer provide a guarantee of health care for seniors. Instead they will be left on their own at the mercy of private insurance companies, with only a highly inadequate voucher unlikely to cover all their costs if they get sick. Medicaid will no longer provide a guarantee of nursing home care for seniors, or help for people with disabilities, or health care to poor children. Instead Medicaid dollars will be slashed (and slashed and slashed) with a meat ax, and the remainder will be given to states to spend however they want to.

The big question now is what President Obama will say in his speech on Wednesday. It seems no one knows. The most well connected (to the White House) policy and political people I know -- people who are very loyal, fully on the team, and always well informed about what the White House will do next -- are universally telling me that the decisions about speech content are very much up in the air. People I know inside the White House who usually get right back to me when I send nervous inquiries in about what will happen next are studiously avoiding me. My conclusion from all this is that there is a serious debate among the folks inside in terms of positioning and policy, that we just don't know how it is all going to come down.

There are of course two aspects to the president's speech, the first being on the policy end and the second on the politics -- although as always, these two things are inextricably linked. On the policy side, the question as usual is whether Obama goes with the D.C. establishment crowd or the middle class. Higher-income lobbyists and pundits in D.C. are oblivious to whether middle-class folks get screwed because they themselves aren't middle class. If Medicare's guarantee of coverage gets eroded or taken away, if a construction worker can't retire for an extra several years, if nursing home coverage for seniors in some state the big shots in D.C. only fly over gets canceled, if my brother who is developmentally disabled loses his coverage, it doesn't trouble them much at all because they don't need all those benefits -- they're golden. Obama needs to come out forcefully -- vehemently -- on behalf of the middle class and those who will struggle mightily to stay in it if the Ryan budget is passed.

Here's the thing: there are plenty of genuinely progressive ways to cut Medicare and Medicaid costs that don't take it out of the hide of middle class or poor folks. Here's one: Medicare should negotiate with drug companies over their prices. That would save a huge amount of money, more and more every year that goes by. And it would save money in the private market as well, as drug companies would have to adjust prices downward in general because of that policy. There are plenty of other regulatory fixes that might impinge on medical-device manufacturers, or for-profit hospitals, or very well-off specialists. You know what else would save on Medicare and Medicaid costs? If the overall rate of health care inflation went down. There are plenty of things in the health reform bill from last year that are likely to be helpful to that, but the Republicans want to kill that bill. But there also are some things that were left out of that bill -- like the public option and negotiating drug prices -- that would help drive health care inflation a lot lower.

Look, even though he has advocated things like the public option and negotiating prices with drug companies before, I'm not expecting that Obama will go there in his speech. My point is this, though: if you are going to take on the topic of lowering the costs of Medicare and Medicaid, you can and definitely should find ways to do it that don't hurt senior citizens and the working middle class. If that is where Obama goes Wednesday, I have no problem addressing Medicare and Medicaid in a conversation about the budget. Especially if his overall approach to the budget is one that helps the working middle class, and does deficit cutting the right way: attacking waste in the military budget; going after no-bid, poorly negotiated and written government contracting; increasing taxes on millionaires, who can well afford it after the orgy of excess they have been experiencing in recent years; ending tax loopholes and subsidies to oil companies, Wall Street bankers, job outsourcers, and other companies like GE that pay no, or way too little, in taxes; stopping direct payments to wealthy agribusiness conglomerates; and taxing financial trading and speculation. If you did all those things, you could balance the federal budget in short order without even touching Medicare or Medicaid, but if in the spirit of bipartisanship you also wanted to cut those budgets, feel free to do so without hurting poor and middle-class folks.

Such a proposal in contrast to the radical destruction of the Ryan budget would be a welcome start to a serious debate over our priorities. The Ryan budget, as I wrote on Friday, has nothing whatsoever to do with the budget deficit. Republicans are ripping the heart of Medicare and Medicaid not to balance the budget but (a) to give more tax breaks to millionaires, and (b) because they want to do away with these programs. As Eric Cantor said, "if we want to America to be what we want America to be... these programs cannot exist."

In his speech on Wednesday, the president needs to do what he is not always comfortable doing. Pick a fight. Show clearly what side he is on. It is time to not float above the water but to dive in and make clear that he's swimming on behalf of all the people who depend on Medicare and Medicaid. Anything else would be the wrong thing to do, both politically and for the people.