Tag Archives: Bill Gates

Bernie Sanders’ Single-Payer Plan Provides Benefits for Billionaires

On Wednesday, socialist Sen. Bernie Sanders plans to introduce the latest version of his single-payer health-care program. If past practice holds, Sanders will call his plan “Medicare for All.” But if he wants to follow Medicare as his model, then the Sanders plan could easily earn another moniker: Benefits for Billionaires.

An analysis released by the Congressional Budget Office (CBO) in August demonstrates how Medicare currently provides significant financial benefits to seniors at all income levels, including the wealthy. Specifically, the CBO paper analyzed lifetime Medicare taxes paid, and lifetime benefits received, by individuals born in the 1950s who live to age 65.

The non-partisan budget office found that at every income level, seniors received more in Medicare benefits than they paid in Medicare taxes. Men in the highest income quintile—the top 20 percent of income—received a net lifetime benefit from Medicare of nearly $50,000, even after taking into account the Medicare taxes and premiums they paid. Women received an even greater net benefit between taxes paid and benefits received at all income levels, reflecting both longer life expectancy (i.e., more benefits paid out) and shorter working histories (fewer taxes paid in).

The CBO analysis confirms prior work by the Urban Institute—no right-wing think tank—that Medicare pays out more in benefits than it receives in taxes at virtually all income levels. For instance, according to Urban’s most recent study, a high-earning male turning 65 in 2020 will pay in an average of $123,000 in Medicare taxes, but receive an average of $222,000 in benefits.

Melinda Gates Doesn’t Need Government Health Care

Some may quibble with the work by CBO and Urban Institute for containing an important oversight. In analyzing only Medicare benefits and Medicare taxes paid, the two papers omit the portion of Medicare’s financing that comes from general revenues—including the income taxes paid primarily by the wealthy. While it’s difficult to draw a precise link between Medicare’s general revenue funding and any one person’s income tax payments, it’s possible that—particularly for one-percenters—income taxes paid will offset the net cost of their Medicare benefits.

But regardless of those important details, the larger point still holds. Even if her taxes do outweigh the Medicare benefits received, why does Melinda Gates need the estimated $300,000 in health care benefits paid to the average high-income woman born in the 1950s? Does that government spending serve a useful purpose?

Moreover, if Medicare provides a net benefit to the average senior at virtually every income bracket, how does the program as currently constructed represent either 1) social insurance or 2) a sustainable fiscal model? Under an insurance model, some individuals “win” by receiving greater net benefits, while some individuals “lose” by not fully receiving back the money they paid in. But given that multiple analyses have demonstrated that virtually every cohort of seniors currently benefits from Medicare, then the program’s only true “losers” are the future generations of Americans who will fund today’s profligate spending.

We Don’t Have Money to Subsidize the Rich

Yes, Medicare currently does include some means testing for wealthy beneficiaries, in both the Part B (physician) and Part D (prescription drug) portions of the program. But common sense should dictate first that wealthy individuals not only should be able to opt-out of Medicare if they so choose—because, strange as it sounds, the federal government currently forbids individuals from renouncing their Medicare benefits—wealthy seniors should not receive a taxpayer subsidy at all. Whether in Medicare or Sanders’ socialist utopia, the idea that Warren Buffett or Bill Gates warrant taxpayer subsidies defies credulity.

Despite this common-sense logic, liberals continue to support providing taxpayer-funded benefits for billionaires. In 2011, then-Rep. Henry Waxman (D-CA) said “if [then-Speaker John] Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.” Perhaps Waxman views keeping wealthy seniors in Medicare as a form of punishment for the rich. After all, nearly nine in ten seniors have some form of supplemental insurance, and a form of “insurance” one must insure against may not be considered an unalloyed pleasure.

Regardless, Medicare faces its own financial reckoning, and sooner rather than later. In 2009—the last trustees’ report before Obamacare introduced fiscal gimmicks and double-counting into Medicare—the program’s actuaries concluded Medicare’s Hospital Insurance Trust Fund would become functionally insolvent this year. Given that bleak outlook, neither Medicare nor the American people can afford Sanders’ ill-conceived scheme to provide taxpayer-funded health benefits to wealthy 1-percenters.

This post was originally published at The Federalist.

Democrats’ Hypocrisy on the Trump Budget

As expected, the Left had a harsh reaction to President Trump’s first budget on its release Tuesday. Bernie Sanders called the proposed Medicaid reductions “just cruel,” the head of one liberal think-tank dubbed the budget as a whole “radical,” and on and on.

But if liberals object to these “draconian cuts,” there’s one potential solution: Look in the mirror.

Liberals’ supposed outrage over reductions to entitlements largely serving poor people would look slightly less disingenuous if they hadn’t made the same hyperbolic comments about reducing entitlement spending on middle-class and wealthy retirees. If the Left believes the budget reduces spending from anti-poverty programs too deeply, that in part stems from the president’s (flawed) conclusion that Social Security and Medicare reforms are too politically toxic to propose.

And exactly who might be to blame for creating that toxic environment?

Democrats Are Using The ‘Mediscare’ Playbook

Democrats have spent the past several political cycles running election campaigns straight out of the “Mediscare” playbook. In case anyone has forgotten, political ads have portrayed Republicans as literally throwing granny off a cliff.

This rhetoric about Republican attempts to “privatize” Medicare came despite several inconvenient truths:

  1. The “voucher” system Democrats attack for Medicare is based upon the same bidding system included in Obamacare;
  2. The Congressional Budget Office concluded one version of premium support would, by utilizing the forces of competition, actually save money for both seniors and the federal government; and
  3. Democrats—in Nancy Pelosi’s own words—“took half a trillion dollars out of Medicare” to pay for Obamacare.

Given the constant attacks from Democrats against entitlement reform, however, Donald Trump made the political decision during last year’s campaign to oppose any changes to Medicare or Social Security. He reiterated that decision in this week’s budget, by proposing no direct reductions either to Medicare or the Social Security retirement program. Office of Management and Budget Director Mick Mulvaney said the president told him, “I promised people on the campaign trail I would not touch their retirement and I would not touch Medicare.”

That’s an incorrect and faulty assumption, of course, as both programs rapidly spiral toward insolvency. The Medicare hospital insurance trust fund has incurred a collective $132.2 billion in deficits the past eight years. Only the double-counting created by Obamacare continues to keep the Medicare trust fund afloat. The idea that President Trump should not “touch” seniors’ retirement or health care is based on the fallacious premise that they exist beyond the coming decade; on the present trajectory, they do not, at least not in their current form.

Should Bill Gates Get Taxpayer-Funded Healthcare?

That said, the president’s reticence to “touch” Social Security and Medicare comes no doubt from Democrats’ reluctance to support any reductions in entitlement spending, even to the wealthiest Americans. When Republicans first proposed additional means testing for Medicare back in 2011, then-Rep. Henry Waxman (D-CA) opposed it, saying that “if [then-House Speaker John] Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.”

In other words, liberals like Henry Waxman, and others like him, wish to defend “benefits for billionaires”—the right of people like Bill Gates and Warren Buffett to receive taxpayer-funded health and retirement benefits. Admittedly, Congress passed some additional entitlement means testing as part of a Medicare bill two years ago. But the notion that taxpayers should spend any taxpayer funds on health or retirement payments to “one-percenters” would likely strike most as absurd—yet that’s exactly what current law does.

As the old saying goes, to govern is to choose. If Democrats are so violently opposed to the supposedly “cruel” savings proposals in the president’s budget, then why don’t they put alternative entitlement reforms on the table? From eliminating Medicare and Social Security payments to the highest earners, to a premium support proposal that would save seniors money, there are potential opportunities out there—if liberals can stand to tone down the “Mediscare” demagoguery. It just might yield the reforms that our country needs, to prevent future generations from drowning in a sea of debt.

This post was originally published at The Federalist.

One Easy Way to Start Reforming Entitlements

During his election campaign and the subsequent presidential transition, Donald Trump expressed a high degree of discomfort with reducing Medicare benefits. His position ignores the significant financial peril Medicare faces—a whopping $132.2 billion in deficits for the Part A (Hospital Insurance) trust fund over the past eight years.

That said, there is one easy way in which the new administration could advance the cause of entitlement reform: allow individuals—including wealthy individuals, like, say, Donald Trump—to opt out of Medicare.

Under current Social Security Administration (SSA) practice dating back to at least 1993, individuals who apply for Social Security benefits are automatically enrolled in Medicare Part A (hospital coverage). While Medicare Part B (physician coverage) requires a separate application process and monthly premium payment, Part A is effectively mandatory for all Social Security recipients. Individuals who do not wish to enroll can do so only by not applying for Social Security benefits. Put another way, the federal government holds individuals’ Social Security benefits hostage as leverage to forcibly enroll them in Medicare Part A.

If you think the government holding benefits hostage to forcibly enroll seniors—even wealthy ones—in taxpayer-funded Medicare sounds more than a little absurd, you wouldn’t be the first one. Several years ago, several conservatives—including former House Majority Leader Dick Armey—filed a lawsuit in federal court, Hall v. Sebelius, seeking to overturn the SSA guidance. The plaintiffs wanted to keep their previous private coverage, and did not wish to lose the benefits of that coverage by being forcibly enrolled in Medicare Part A.

We Have A Roadmap To Remedy This Problem

Unfortunately, both a federal district court and the Court of Appeals for the District of Columbia agreed with the federal government. The majority opinions held that the underlying statute distinguished being “entitled” to Medicare Part A benefits from “enrolling” in Part B, meaning the government was within its rights to deny the plaintiffs an opportunity to opt out of Part A.

However, a dissent at the Court of Appeals by Judge Karen LeCraft Henderson can provide a roadmap for the Trump Administration to remedy the absurd scenario of individuals being forcibly enrolled in a taxpayer-funded program. Judge Henderson held that the Social Security Administration had no statutory authority to prohibit (via its Program Operations Manual System, or POMS) individuals from disclaiming their Medicare Part A benefits. While the law “entitles” individuals to benefits, it does not give SSA authority to force them to claim said benefits. SSA published guidance in its program manual exceeding its statutory grant—without even giving the public the opportunity for notice-and-comment before establishing its policy.

It’s Time To End The SSA’s Kafka-esque Policies

During the Cold War, East German authorities referred to the barriers surrounding West Berlin as the “Anti-Fascist Protective Wall”—implying that the Berlin Wall stood not to keep East Berliners in East Germany, but West Berliners out. One can’t help but notice a similar irony in the Medicare opt-out policies developed by the Social Security Administration. After all, if Medicare is so good, why must SSA hold individuals’ Social Security benefits hostage to keep them enrolled in the program?

The Trump Administration can easily put an end to the Social Security Administration’s Kafka-esque policies—and take one small step towards reforming entitlements—by instructing the new Commissioner of Social Security to work with the Centers for Medicare and Medicaid Services to develop a means for individuals to opt out of the Medicare Part A benefit. The savings from such a policy would likely be modest, but why should the federal government force the expenditure of taxpayer dollars on benefits that the beneficiaries themselves do not wish to receive?

The simple answer: it shouldn’t. Perhaps Bernie Sanders or Elizabeth Warren view forcible enrollment in Medicare as “punishment” for wealthy seniors. But at a time when our nation faces nearly $20 trillion in debt, individuals of significant means—whether Bill Gates, Donald Trump, or even Hillary Clinton—shouldn’t be forced to accept taxpayer-funded benefits. The Trump Administration eliminating this government absurdity would represent a victory for fiscal responsibility—and sheer common sense.

This post was originally published at The Federalist.

Senate Democrats Defend Benefits for Billionaires

Amidst the ongoing discussion about the need to reform entitlements, this morning’s New York Times article on the payroll tax conference included these two interesting paragraphs:

“The largest sticking point may be Medicare.  The House-passed yearlong extension would increase premiums for high-income beneficiaries and increase the number of people who would have to pay extra.  About 5 percent of beneficiaries now pay higher premiums based on income.  The proportion would eventually rise to 25 percent under the House bill and under a separate deficit-reduction plan proposed in September by Mr. Obama.

Senate Democrats want no part of that.  They say the White House proposal came as part of a broad deficit-reduction plan that included tax increases on the wealthy.  If Republicans will not make concessions on revenues, the Democrats are not going to give Republican Congressional leaders what they want most: a concession on entitlements to defang Democratic charges in the coming campaign that the Republican Party plans to dismantle the health care program for the elderly.”

In other words:

  1. Senate Democrats will NOT reduce subsidized health benefits for billionaires like Warren Buffett and Bill Gates unless Republicans agree to a massive tax increase – at a time when long-term unemployment remains at record highs.
  2. Democrats do not want to deviate from prime electoral strategy – a “Mediscare” campaign designed to distract from the fact that their policies have failed to create the jobs that were promisedeven when it comes to reducing entitlement payments to billionaires.

Medicare faces a significant – and imminent – financial crisis.  The program is now running bigger deficits than Greece, and the President’s own Chief of Staff admitted that the program “will run out of money in five years if we don’t do something.”   This morning’s New York Times article only re-emphasizes a key difference between the parties: Democrats itching for a massive tax increase are unwilling to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – because they would rather gain politically than fix the problem.

House Democrats’ Absurd Double Standards on Benefits for Billionaires

On Friday evening, Democrats on the House Energy and Commerce Committee sent out an analysis of the health provisions of the House Republican payroll tax proposal in an e-mail.  Of particular note is the following sentence: “Increases and other changes made to the premium structure of Medicare raise fundamental and difficult issues for the program and certainly should never be considered in the context of addressing short term issues.”  This sentence obliquely refers to the proposals for additional means-testing included in the House Republican payroll tax bill – which come directly from the deficit reduction proposal the President submitted to the Joint Committee earlier this fall.

There’s a good reason why House Democrats might want to be circumspect about criticizing the means-testing proposal – because their position results in what can most charitably be described as feats of tautological jujitsu:

  • Congress SHOULD raise taxes on “the rich” to pay for a short-term payroll tax extension – but SHOULD NOT take away taxpayer subsidies for wealthy Medicare beneficiaries to pay for a short-term “doc fix” extension;
  • Congress SHOULD pass the tax increases the President proposed in his September submission to the Joint Committee right away – but SHOULD “CERTAINLY” NOT pass proposals to reduce wealthy beneficiaries’ Medicare subsidies included by the President in the same September proposal without months or years more study;
  • Choosing not to subsidize the health benefits of billionaires like George Soros is a “difficult” decision, but raising taxes by trillions of dollars is easy; and
  • Taking away wealthy Medicare beneficiaries’ subsidies “raise[s] fundamental…issues for the program,” but raising taxes on job creators in the middle of a sluggish economy raises no concerns, fundamental or otherwise, about the impact on stubbornly high unemployment.

It’s clear that Medicare is in the midst of a fiscal crisis – the program is projected to suffer a record deficit of nearly $40 billion this fiscal year, a greater deficit than that faced by Greece.  Even President Obama has admitted that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”  Yet House Democrats have articulated a philosophical position on which they are apparently willing to fight:  The holy right of people like Warren Buffett and Bill Gates to have their health benefits subsidized by federal taxpayers.

Democrats Defend (Medicare) Benefits for Billionaires

The latest version of Democrats’ payroll tax proposal includes two provisions designed to reduce federal welfare subsidies paid to millionaires and billionaires from the unemployment insurance and food stamp programs.  But it’s worth emphasizing that the new bill does NOT impose additional means-testing on Medicare (or Social Security, for that matter).

If ever there was a program in desperate need of reform NOW, it’s Medicare:

  • The Congressional Budget Office projects that Medicare Part A will spend nearly $40 billion more than it takes in this fiscal year, and run a further deficit of nearly $30 billion next year.
  • At a time when Europe faces major sovereign debt woes, Medicare is now running a bigger fiscal deficit than Greece.
  • The President’s Chief of Staff, Bill Daley, said in July that the program “will run out of money in five years if we don’t do something.”
  • And the President himself acknowledged that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.”

The President’s most recent deficit submission proposed additional means-testing for wealthy beneficiaries.  One would think that a party breathlessly waiting to raise taxes on “the 1%” would be chomping at the bit to take Medicare subsidies away from people like Bill Gates and Warren Buffett.  Yet what have Democrats done on this Medicare reform?  Nothing.  And why do they want to do nothing?  In a word, politics:

  • One House Member objected to any agreement between the President and Republicans on fundamental entitlement reform, because reforming entitlements now would “cancel out any bludgeoning that Democrats might give the Republicans over Medicare and Medicaid.”
  • The Washington Post’s liberal Plum Line reported in July that Senate Democrats don’t want to pass Medicare reform because it would be “giving away the biggest [political] advantage” Democrats have had “in some time.”
  • In a story last week, Rep. Steve Israel, Chair of the Democratic Congressional Campaign Committee, “declined to say whether a [deficit] agreement to cut entitlements might have hindered his political strategy.”  In other words, Democrats WANTED the supercommittee to fail – so that they could resume their “Mediscare” political attack ads against Republicans.

The latest payroll tax proposal only re-emphasizes one key difference between the parties: Democrats itching for a massive tax increase are unwilling to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – because they would rather gain politically than fix the problem.

Democrats Already Raised Taxes — To Pay for More Spending

During his opening remarks this morning, Leader Reid continued the Democrat theme of haranguing “millionaires and billionaires” and insisting that Republicans must raise taxes – which will harm jobs during a time of continued high unemployment – as part of a “balanced” solution to America’s fiscal crisis.  These comments miss one key fact:  Democrats ALREADY raised taxes – on rich and poor alike – as part of the health care law, and they did so NOT to reduce the deficit, but to pay for more federal spending.

CBO’s long-term budgetary outlook, released last month, quantifies the large effect of Obamacare’s tax increases – effects that will only grow over time.  Table 6-2 notes that the tax increases in Obamacare will increase revenues by 1.2% of GDP between now and 2035.  Based on the size of the economy in 2011 dollars, that amounts to a $180 billion annual tax increase thanks to the law.  In addition, CBO estimates that “Cadillac tax” on high-cost health plans “would increase total revenues by more than 0.7 percent of GDP in 2035 and higher percentages thereafter.”  This year’s report did not make long-range estimates, but in last year’s report CBO projected the “Cadillac tax” alone would raise 3 percent of GDP in 2080.  Because the “Cadillac tax” will continue to grow over time, its impact in 2080 would be about a $450 billion annual tax increase in 2011 dollars – just for one tax increase, for one year.

Meanwhile, multiple Democrats have made comments that additional means-testing of Medicare and other entitlements is a non-starter.  It’s interesting that the same Democrats who want to tax “millionaires and billionaires” say they are “absolutely opposed” to making those same individuals pay more for their taxpayer-funded benefits.

To sum up:  After having raised taxes once to pay for Obamacare’s unsustainable new entitlements, Democrats want to raising taxes on small American job creators AGAIN – in order to ensure that Warren Buffett will continue to receive his Social Security pension and Bill Gates can obtain taxpayer-funded Medicare benefits.  With this tax-and-spend mentality on full display among Democrats, is it any wonder that our nation is facing trillion-dollar deficits – or that businesses are reluctant to hire the new workers that would spark greater economic growth?

Democrats Support Benefits for Billionaires

CongressDaily this afternoon reports on comments by several Democrats regarding possible means-testing of Medicare benefits and/or eligibility.  HELP Committee Chairman Harkin said in an interview: “Just as Social Security is not means-tested, neither is Medicare.  We have a program that is means-tested, and it’s called Medicaid.  Medicare should not be means-tested.”  Likewise, Sen. Mikulski said she was “absolutely opposed to means-testing” benefits.  Meanwhile, Finance Committee Chairman Baucus said “we’ve got to have revenue…we need revenue.”

To sum up:  Democrats want to obtain new revenue – largely by raising taxes on small businesses and other American job creators – in order to ensure that Warren Buffett will continue to receive his Social Security pension and Bill Gates can obtain taxpayer-funded Medicare benefits.  It appears rather perplexing that Democrats are willing to raise taxes on “millionaires and billionaires” in order to fund entitlement benefits for those same individuals.  This contradiction is heightened when you consider that means-testing entitlement benefits for wealthy individuals is much less likely to have secondary economic impacts than raising taxes on job creators.

It’s this kind of flawed economic and fiscal logic – raising taxes on job creators in order to fund benefits for billionaires – that explains why Democrats’ trillion-dollar stimulus has failed to deliver the jobs it promised, or why the health care law has failed to deliver the $2,500 per family reduction in premiums candidate Obama promised.

Henry Waxman Defends Benefits for Billionaires

The liberal website Talking Points Memo noted this week that in his speech Monday regarding the debt limit, Speaker Boehner supported the idea of means-testing Medicare for wealthy individuals – questioning whether federal taxpayers should be subsidizing the health care benefits of those like Pete Peterson, the billionaire founder of Blackstone Group and head of a fiscal responsibility foundation.  That prompted this retort from California’s Henry Waxman: “Medicare is a social insurance program where you get back for paying in, whether you are middle class, poor, or rich.  If Mr. Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.”

To summarize:  Rep. Waxman would have the federal government raise taxes on the wealthy to pay for taxpayer-subsidized benefits (i.e., Medicare and Social Security) for these same individuals.  The difference between the two philosophies is clear:  Withdrawing taxpayer-funded benefits (particularly Medicare benefits, which are non-financial in nature) from wealthy individuals will NOT have an economic impact – but raising taxes on job creators WILL.  If Democrats are interested in “soaking the rich” at a time of high unemployment, why are Democrats focused on the side of the equation that will harm jobs – rather than questioning why Warren Buffett and Pete Peterson need taxpayer-financed benefits in the first place?

Adding to this absurdity is that the federal government is already forcing individuals to purchase government-run health care, by prohibiting them from opting out of Medicare.  So at a time of trillion-dollar deficits, federal taxpayer dollars are being used to defend in court a policy that FORCES individuals like Warren Buffett to purchase government-run health care (and, at least in some cases, give up their private coverage in the process).

Thankfully at least Democrats who have expressed some support for placing income-related tests on taxpayer funded benefits.  But if Democrats seek credibility on entitlement and deficit reform, they might want to arrive at a better reason to raise taxes on job creators than to finance Warren Buffett’s health care or Bill Gates’ pension.