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Is Obama Selling Us Out on Medicare?

Hiking the eligibility age is such a terrible idea Obama can't possibly be considering it. Or can he?

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The most likely scenario is that seniors will bear the cost of insurance themselves – or go without insurance entirely. That means they’ll be sicker when they do eventually qualify for Medicare (this already happens, by the way, when older Americans can’t afford insurance that covers preventive care or treatment, and let illnesses fester until they’re covered by Medicare.) That too means higher Medicare costs. The move might save the federal government $5.7 billion, at best, at a cost of at least $11.4 billion to states, seniors and employers, according to the Indiana University School of Medicine’s Aaron Connell in the Wall Street Journal.

In the single best single rebuttal to the whole idea, Connell makes plain its revolting class bias. Beltway types like to say a hike in the eligibility age of both Social Security and Medicare is necessary because Americans are living so much longer, but that’s not true for all of us. People in the top half of the American income scale have seen life expectancy increase by more than five years since 1977; those in the bottom half experienced an increase of barely a year.

Meanwhile, a compromise on the top tax rates is likewise a bad idea, because 39.6 percent is already a compromise. Everyone who talks about rebuilding the middle class needs to acknowledge how we did it last time around: With a top marginal tax rate above 90 percent through both Eisenhower administrations. John F. Kennedy cut it to 70 percent, and that’s where it stayed until Reagan slashed it – and we know how good the Reagan revolution was for the middle class. I’m not saying that’s where it should return, but if we keep sacrificing progressivity, we’ll never have the money we need to do what we need to do. Tax rate hikes shouldn’t stop at $250,000. There should be more, and higher, tax rates on the super rich.

The Democrats’ ace in the hole in this debate is their willingness to go over the fiscal cliff, to let the top tax rates go up, and then come back with a bill Jan. 3 to cut taxes for everyone but the top 2 percent. As many have said before, the “cliff” is more like a slope or curb, it doesn’t take effect immediately, and there’s time for negotiation to avoid or blunt its worst impacts. The more liberal newly elected Congress could also take up the issue of spending cuts that will hit low-income Americans.

The White House seems to be playing both sides of the street on the question of whether it’s thinkable to go over the cliff. On Wednesday, Treasury Secretary Timothy Geithner told reporters the administration is “absolutely” prepared to do so if the GOP won’t budge on top tax rates. But that same day, the White House was meeting with Latino groups to build support for a theoretical fiscal cliff deal, by outlining the ways Latinos would be hurt by the tax hikes and program cuts that would (eventually) be triggered. Thursday they did the same thing with African American groups. As long as we’re getting racial, it’s worth pointing out that keeping the top tax rates low, or compromising at 37 percent, is an absolute Christmas gift for wealthy white people, who make up a wildly disproportionate share of the top earners.  And the lower life expectancy of African Americans makes raising the Medicare eligibility age particularly cruel.

So yeah, I think these are appalling ideas. We just had an election in which the president promised to protect Medicare, and never once publicly supported raising the eligibility age to 67, while Romney’s advisors said his plan included hiking the age (Romney himself avoided details about any of his plans.) Post-election polls find that  two thirds of voters oppose increasing the Medicare eligibility age. Should this deal become reality, it would reinforce the cynicism Americans harbor about government – and about Democrats. Deservedly.

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