President Obama Did Not "Raid" the Medicare Trust Fund

The NYT had an article reporting on how the presidential campaigns plan to make Medicare an issue in Florida as they compete for older voters. At one point it quotes Ed Gillespie, a senior adviser to the Romney campaign:

"The fact is, we’re going to go on offense here. Because the president has raided the Medicare trust fund to the tune of $716 billion to pay for a massive expansion of government known as Obamacare."

It would have been helpful to point out to readers that President Obama did not "raid" the Medicare trust fund. This concept literally has not meaning. The trust fund holds U.S. government bonds that correspond to the surplus it has accumulated over the years. President Obama did not default on these bonds, which means that he has not pulled any money out of the Medicare system.

The claim that President Obama "raided" the trust fund because he has proposed additional health care spending in other areas (including the elimination of the doughnut hole in the Medicare prescription drug benefit) is like claiming that a person's checking account had been raided because the bank lent the money to a small business. This is the way a modern economy works.

Either Mr. Romney's senior advisor is completely clueless about the way the economy works or he is deliberately misrepresenting President Obama's actions. Either case would make an interesting news story.

Can't 'raid' what you don't touch
written by Robert Salzberg, August 14, 2012 6:38

The Medicare Trust funds had absolutely nothing to do with the Medicare cuts. There was no money lent out or borrowed from the trust funds. All the money came from reductions in payment to providers.

Romney the Rent Seeker
written by Last Mover, August 14, 2012 7:40

@Salzberg

All the money came from reductions in payment to providers.

Exactly. This is why Romney the Rent Seeker is ranting about Obama cutting Medicare with Obamacare at the same time ranting on about excesses of big government.

It's all about the economic rent imbedded in higher prices and unnecessary wasted quantity volumes of Medicare, exactly the part of Medicare Romney wants to preserve that provides zero benefits to users since they're all shifted to providers as rents.

Misusing a Heritage Source, which extracts from a CBO report.
written by AndrewDover, August 14, 2012 9:36

By Gillespie logic, Mitt Romney is proposing to raid the Social Security Trust fund by lowering COLAs and raising the retirement age.

Actually Gillespie is stumbling while trying to attack Obama for lowering the growth in Medicare spending. He gets his data from the Heritage Foundation:

http://blog.heritage.org/2012/08/01/obamacare-robs-medicare-of-716-billion-to-fund-itself/

comes up with:
"According to the CBO, the PAYMENT CUTS in Medicare include (billions):
$260 for hospital services.
$39 for skilled nursing services.
$17 for hospice services.
$66 for home health services.
$33 for all other services.
$156 cut in payment rates in Medicare Advantage;
$56 for disproportionate share hospital payments.
...

"In total, Obamacare raids Medicare by $716 billion from 2013 to 2022."

The CBO reference 43471-hr6079.pdf has those numbers on page 14.

At other times Romney and Ryan complain that Obama has increased spending wildly. Consistency is not their strong point.

Romney's budget does the same thing too
written by AndrewDover, August 14, 2012 10:11

And of course the Ryan budget also uses the same reductions.

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/14/ryans-budget-keeps-obamas-medicare-cuts-full-stop/?hpid=z1

"Clueless," "Misrepresenting," - It's Called "Swiftboating."
written by James, August 14, 2012 1:53

Lie unrelentlessly about your opponent's strong point and add your counterpoints (who care about its veracity) to cloud up your opponent's so-called strenght.

No average people would have the time and analytics to sift through all those muddy points. At the end, your opponent's strength become irrelavant.

And it's a winning formula.

Yet, Bishop Romney insists he is very faithful as he tithe, etc., I guess lie is ok in LDS.

gillespie typical romney liar
written by mel in oregon, August 14, 2012 2:29

no matter how much the r boys try & tar obama, the facts are out on them which is the whole key to the election. is obama bad? of course. are the r boys the antichrist? definitely!

-2

This is the biggest lie being told - at least so far
written by jumpinjezebel, August 14, 2012 2:54

No raid on Medicare - only a reduction in the overpayments to Medicare Supplement Insurance providers. No reduction in benefits for this but actually an increase in benefits due to the doughnut hole elimination WHICH PRIVATE RYAN WOULD ELIMINATE BUT KEEP THE VERY SAME REDUCTIONS. What a joke he is.

Mr.
written by Truthteller, August 17, 2012 11:02

So let me get this straight, replacing currency in the trust fund with IOUs isn't raising the trust fund? Has this author ever heard of Enron? It's an accounting gimmick to "balance" the books of the trust account. It's smoke and mirrors. It may have been true at some point that US bonds were as good as cash, but guess what? With no real prospects of paying off our debts, the security of treasury bonds is seriously suspect.

The bank analogy is the most asinine I've heard. Banks loan money at interest to earn a rate of return higher than they pay on checkings or savings accounts. Taking money out of Medicare/Medicaid to pay for new spending programs is not the same...at all. That this author brazenly demagogues the Romney campaign as being misleading or clueless on the economy as he conspicuously demonstrates his own profound ignorance is a sweet but alarming irony.

President Obama Did Not "Raid" the Medicare Trust Fund

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