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7 Chilling Facts About Retirement in America That Should Make Obama Tremble Before Cutting Social Security and Medicare

Obama's plan would be economically irresponsible, socially disruptive and morally repugnant.

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5. Americans oppose cuts:  The American people have made it abundantly clear that they do not want Social Security and Medicare cut. And yet the President has made your retirement a bargaining chip in budget negotiations with Republicans, smuggling the cuts through the customs of specious arguments about “the need to govern” and so on. Let’s call this what it is: immoral. The social insurance that provides hard-working Americans protection against financial and health calamities should not be a bargaining chip any more than civil rights should be a bargaining chip. The dignity of our elderly, not to mention the health of our children and vulnerable citizens who rely on these programs to live, are part of the fundamental structure of a decent society and are essential to our economic prosperity. How, for example, is a person at peak working age to remain fully productive when she has to care for elderly parents who can’t make ends meet?

A more cynical view of what’s happening is that Obama is paying off his wealthy donors. A political scientist I know warned me when Obama was elected the first time that he would do very little on financial reform because Wall Street had always been one of his major funders. That same political scientist warned me this time around that Obama would make cutting entitlements a priority in his second term for much the same reason: a coalition of big business interests supported his reelection, and this is what they want in return. If Obama goes through with these cuts, he will have spelled out for all those who supported him exactly who he represents.

6. Means-testing Medicare is discredited:  Reports say that Obama will propose to cut $400 billion from Medicare over the next decade. One idea that may appear in his plan is means-testing, a notion that has long been the golden dream of those who hate Medicare and Social Security because it tends to diminish political support for the programs.

A few months back, when a lot of Democrats and liberals were touting means-testing, I decided to ask several prominent economists, including a Nobel Prize-winner, to explain to me what they make of it. Please turn your attention to: “ 6 Reasons Joseph Stiglitz and Other Top Economists Think Means-Testing Medicare and Social Security Is a Destructive Idea.” Their conclusion: means-testing is nothing more than a back-door strategy for taking away benefits earned by hard-working people. As Stiglitz explained, it undermines progressive values by going against notions of fairness and shared citizenship while promoting the false idea that Social Security and Medicare are welfare, which they aren’t. As James Galbraith explained, these programs are not charity; they are social insurance.

“We don’t means-test public education,” Stiglitz told me, “because we believe that we want people to have the same opportunities and we lose out on that with means-testing.” Shouldn’t that go for dignified retirement and adequate medical care in old age? Stiglitz thought so.

Healthcare costs are a terrible problem, but not because your grandmother receives benefits. The problems stems from monopolistic conditions in the insurance industry, ridiculously high prices for drugs charged by pharmaceutical companies, and a fee-for-service system that encourages doctors to charge for expensive and unnecessary services. If politicians were really interested in addressing rising healthcare costs, they would deal with those issues.

7. Women at risk:  Woman were instrumental in getting Obama elected, and yet he is proposing to throw them under the bus. As Manisha Thakor points out, women live longer than men and need more support in old age. Thakor notes that recently, ABC World News Tonight anchor Charlie Gibson reported that when it comes to healthcare, male retirees required $170,000, while female retireres had to come up with $240,000. And yet how are they going to find this money when they retire with two-thirds of the assets of men?