Tag Archives: Deficit

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Paul Ryan questions Chief Actuaries of Medicare, Medicaid and Social Security

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I found all of this stuff on the House Budget Committee web site.

Medicare and Medicaid

Paul Ryan interviews Richard Foster, Chief Actuary of the Centers for Medicare and Medicaid Services.

Excerpt of transcript:

HBC CHAIRMAN RYAN: As you may know, I’ve been working across the aisle with a member of the Oregon delegation from the Senate on a premium support plan that uses competitive bidding to help determine the contribution. Competitive bidding we’ve seen has worked well in Medicare Part D and Medicare Advantage.  I’d like to get your thoughts on choice and competition as it relates to these previous successful reform plans. Given what we’ve seen in these aspects of Medicare, do you believe that competitive bidding is a process that can be successfully applied Medicare-wide?

CMS CHIEF ACTUARY FOSTER: Yes, I think it can. Obviously, it would represent a large change from the status quo, but I think it could work. We’ve seen the signs of this – you mentioned the Part D prescription drug program, for example, where the different drug plans compete against each other on the quality of their benefit package and the premium level. And we’ve seen – every year since Part D started – a migration of beneficiaries to more efficient plans with lower premiums. So that can help. We’ve also seen for durable medical equipment that competitive bidding, in this particular area of Fee-For-Service Medicare, reduced prices that we had to pay by 40 percent.

RYAN: By forty percent?

FOSTER: Forty percent, that’s right.

RYAN: Those are the kinds of cost savings we’re going to have to achieve if want to make good on the promise of the Medicare guarantee.  This should not be a partisan issue. Competitive bidding is something Alice Rivlin has been a champion of, Ron Wyden has been talking about, the Bipartisan Policy Center, and more. There is a lot of data out there that competitive bidding when applied Medicare-wide can achieve the benefit of keeping these benefits going while attacking the root cause of cost growth.

It sounds to me like there is a real crisis, that Ryan has a plan to solve it, and that the person who is the most aware of the finances of these two entitlements agrees with Ryan.

Social Security

Paul Ryan interviews Stephen Goss, Chief Actuary of the Social Security Administration.

Excerpt of transcript:

HBC CHAIRMAN RYAN:  If we do [nothing], then we have an across-the-board cut of about 23 percent that occurs in benefits. Is that correct?

SSA CHIEF ACTUARY GOSS: Exactly… The Commissioner standing at that time would simply have 77 cents available for every dollar of scheduled benefits, and would not be permitted to spend more than that. We do not have borrowing authority. So a decision would have to be made about who would get the money. We could have an across-the-board 23% cut immediately, or a Commissioner could say, ‘Well we’re not going to pay the March benefits in March. We’ll wait until April – wait until more revenues come in to allow full payment a month late.’ After a few months we would perhaps then have to start paying benefits twomonths late. So this would be a way that it could be handled. Of course, if people have to pay rent on time, that would be a difficulty. There’s no easy way out on this… We hope and pray that Congress would indeed act well before we ever hit the Trust Fund reserve exhaustion.

RYAN: Given that we have this abrupt 23% cut that occurs in law – current law – is it not wise so start reforming now, sooner, so that the distribution of the change is spread more broadly and evenly across income cohorts? Let me ask it this way: does that abrupt 23% cut hit current senior cohorts? A person who is turning 62, or 65 today – that affects them as well, correct?

GOSS: It certainly would. They would be at an older age at that time but clearly it would affect them. That is assuming that we wait and do absolutely nothing until that point.

RYAN: So if one provides reforms soon, could you not prevent these kinds of effects from hitting those current cohorts? Could you not phase reforms in gradually that prevent that 23% cut from happening so it doesn’t affect people who are currently in or near retirement? Could you structure reforms that prevent that from happening if you act sooner?

GOSS: Absolutely. We have a number of proposals – including yours Chairman Ryan – and many other proposals that would take exactly that approach. Our trustees and everybody who speaks on this has opined extensively about the value of acting sooner rather than later, so that we can have gradual changes phased in and we have more options if we act relatively soon.

In 2006, Nancy Pelosi was asked when she would be willing to fix these entitlement programs. Her reply? “Never. Is never good enough for you?“. Democrats hate children – they want to pile debt upon debt onto future generations, who will not even have mothers and fathers to take care of them. First they smash the family with no-fault divorce and same-sex marriage. Then they run up trillions and trillions of dollars in debt handing out bailouts and green energy grants to their election fundraisers. It’s sick.

News

UK government has “run out of money”

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From the UK Telegraph.

Excerpt:

In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy.

Mr Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers.

“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.”

[…]Mr Osborne is under severe pressure to boost growth, amid signs the economy is slipping back into a recession.

The Institute of Fiscal Studies has urged him to consider emergency tax cuts in the Budget to reduce the risk of a prolonged economic slump.

But the Chancellor yesterday said he would stand firm on his effort to balance the books by refusing to borrow money. “Any tax cut would have to be paid for,” Mr Osborne told Sky News. “In other words there would have to be a tax rise somewhere else or a spending reduction.

“In other words what we are not going to do in this Budget is borrow more money to either increase spending or cut taxes.”

What I thought was funny was the poll in the article. It had three choices. “Tax the rich more”, “Borrow more” and “We can’t afford tax cuts”. There was no option to cut spending! But maybe there is nothing that can be cut?

Look at this article from the UK Daily Mail. (H/T Dina)

Excerpt:

The Tavistock Clinic is based in an anonymous concrete building in North London. Once there, you have to go to the third floor to find the Orwellian-sounding Gender Identity Development Unit.

The unit received £1,042,000 in funding last year from the local healthcare Trust. In layman’s terms, it treats patients who believe they are ‘trapped in the wrong body’.

Few would associate such a place with children barely old enough to attend school.

But it emerged this week that a little boy called Zach Avery, just five years old, now wears his hair permanently in bunches after being assessed by ‘experts’ at the Tavistock and ‘coming out’ as a girl.

And Zach is not an isolated case.

Over the past year, 165 children have been referred to the clinic’s team of social workers, child psychotherapists, psychologists and psychiatrists.

Seven children under the age of five were officially diagnosed with Gender Identity Disorder (GID) — when a person is born one gender, but feels they are the other.

The UK government wants economic growth, but they are not willing to do what works – cut spending and cut taxes. They just can’t give up their social programs. It’s not even an option for them to consider.

News

Europe’s socialist debt crisis: who suffers most? Can bailouts fix it?

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This is the most popular article on Investors Business Daily right now.

Excerpt:

Rational or not, Greece’s street riots and emigration rates signify one thing: Socialism offers very little to the young. So why is the EU’s $172 billion bailout geared toward saving so much of the failed socialist system?

As Europe prepares to deliver a historic $172 billion bailout to Greece in a deal announced Monday, it’s pretty much a given that the austerity conditions required, in the absence of a true free market, will hit youth hardest. Athens will be trashed by another youth rampage, as many youths blame the pain on something other than Greece’s deeply rooted socialism.

A bigger effect will come from Greeks who do recognize reality. They won’t riot. They’ll leave, voting with their feet just as Eastern Europe’s youth once did.

The young in both cases are victims of socialism, which claims to make people equal but, in reality, penalizes the young. For Greece, a country already gutted by a below-replacement birth rate and an aging population, that’s a disaster.

It’s not just Greece, but also every EU state with institutionalized socialism — where high government spending seeks to create a warm blanket insulating everyone from risk, but instead has led to bankruptcy.

[…]One out of five jobs in Greece is held by a bureaucrat, which is why unemployment among the under-24s runs at 42%. A 2010 poll shows that seven out of 10 Greek college graduates seek to leave.

Some 9% of Greek college graduates and at least 51% of Greece’s Ph.D.s are already gone, according to University of Macedonia demographer Lois Lambrianidis.

What jobs there are come from the bottom of a two-tier labor system that shields older workers in Greece’s rigid labor market. Young Greeks earn a 500-and-change euro monthly minimum wage as older workers doing the same work make 700.

In contrast, immigrant-magnet Australia holds packed job fairs at its Athens embassy. In 2011, it took in 249,000 immigrants. In 2012, a 20% rise is expected.

[…]Meanwhile, Spain’s EFE News reports that the Spanish Embassy in Santiago, Chile, has seen a 10% rise in registered nationals to 48,000, while Chile reports a 25% rise in work permits issued to Spanish citizens.

It’s not just jobs that are penalizing Europe’s young. Housing is stacked against youth, too. Eurostat reports that in 2008, 46% of young European adults ages 18-34 lived with their parents — 51 million people.

The two-tier job market, which leans heavily toward unstable contract employment, affects housing choices for the young. Other socialist measures designed to protect current owners against the market also shut out the young.

Perhaps most hostile of all to youth are the EU’s outdated state pension systems — which force the young to pay the pensions of the old as the population shrinks.

In Italy, 14% of all economic output goes to pensions. It’s no coincidence that states attracting Europe’s young, like Chile and Australia, have privatized their social security systems that give youth a real shot at building personal wealth and a credible pension through their own efforts, instead of political favoritism.

This is the direction that the United States is also headed in. What I find mystifying is why young people in the United States are voting for these policies. Young people here have a higher rate of unemployment, and they ought to know that all of these entitlement programs won’t be there for them when they retire. What possible reason could they have for voting for more and more government control?