For Fred Hiatt, the Point of "Entitlement" Reform Is to Hurt Middle Income and Moderate Income People

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Tuesday, 25 February 2014 02:32

That's what readers of his column attacking President Obama for failing to cut Medicare and Social Security would conclude. The piece includes several quotes from Obama in 2009 and 2010 about the need to slow the growth in the cost of Social Security, Medicare, and Medicaid. He then complains that Obama has not followed through by pushing for cuts in these programs.

In fact, Obama did actually propose cuts repeatedly for these programs as part of a deal with Republicans that would include more tax revenue. The Republicans have consistently rejected such a deal. However if the point was to reduce the cost growth in these programs, that has happened. In 2009 the Congressional Budget Office projected that the Medicare and Medicaid together would cost 7.0 percent of GDP in 2024. Their most recent projections show these programs costing just 6.2 percent of GDP in 2024 even with the higher Medicaid costs due to the Affordable Care Act. The savings of 0.8 percentage point of GDP would be more than $200 billion in 2024.

If the point was to save money, this would look a pretty big deal. Of course since most of these savings came from lower health care cost growth rather than reduced benefits, then it wouldn't make anyone happy whose goal was to inflict pain.

Hiatt gets a couple of other items wrong in passing. He complains:

"In 2011, Obama cold-shouldered the fiscal commission he himself had appointed; Democrats feared that embracing its recommendations could hurt in 2012."

Actually the commission made no recommendations since no report captured the necessary majority to be adopted by the commission. What is widely referred to as a report of the commission is actually the report of its co-chairs Alan Simpson and Erskine Bowles.

The piece also refers to former Senator Max Baucus as "pro-trade." This is inaccurate. Baucus has been a consistent supporter of trade agreements. This has been true even when the deals involved increased patent and copyright right protections which reduce trade.