Privatization of Medicare and Social Security on the Trump Agenda
Nancy Altman says Trump’s choice for Secretary of Health and Human Services Rep. Tom Price has pushed for taking Medicare out of government control
KIM BROWN: Welcome to The Real News Network. I’m Kim Brown in Baltimore. President-elect Donald Trump, continues to round out his cabinet selections and the recent decision to appoint representative Tom Price, a six-term Republican Congressman from Georgia, has many in the medical community a bit alarmed, especially those who are concerned about protecting Medicare and Medicaid.
Today we are joined with Nancy Altman to discuss this. She is the founding Co-Director of Social Security Works. She has a 40-year background in the areas of social security and private pensions. She’s also the author of the book titled, The Battle for Social Security: From FDR’s Vision to Bush’s Gamble. And she’s also the co-author of, Social Security Works: Why Social Security Isn’t Going Broke, And How Expanding It Will Help Us All. Nancy, thank you so much for joining us.
NANCY ALTMAN: Thank you so much for having me.
KIM BROWN: Nancy, give us a bit of the background about Tom Cole [sic]. We know that he is a former orthopedic surgeon, but his selection by Donald Trump, really sent a red flag to many who are worried about whether or not Medicare and Medicaid will be on the table for privatization. What do we know about him?
NANCY ALTMAN: Well, first of all, privatizing Medicare has been in the crosshairs of Speaker Paul Ryan and the Republicans for a very long time. President-elect, Donald Trump said he would cut Medicare, but his selections really make you have us all concerned. Because Tom Price was a lieutenant of Paul Ryan, he is very much against Social Security and against Medicare. He was head of the Budget Committee but now he had him right in the Administration in a key position along with Paul Ryan, and these are not good signals for those of us who believe that Social Security and Medicare are extremely important programs that work and, indeed, should be expanded, not cut.
KIM BROWN: Yeah, 130 million Americans rely on Medicare, Medicaid, Social Security. So why are the Republicans so enthusiastic about gutting Medicare, Medicaid, Social Security, and making it available to be privatized?
NANCY ALTMAN: These are programs that work. They show government at its best. Social Security is extremely efficient, as are Medicare and Medicaid. They are indeed more efficient than private sector counterparts. They are an example of how government can fill needs not met by the private sector, and do it better than the private sector. This is against the anti-government zealot’s view. It really is a shining example of how government, which really is all of us just working together collectively, can work for us.
Since the 1930s with Social Security and since the 1960s with Medicare and Medicaid, the conservatives and anti-government types have had their eyes on getting rid of these programs, but they’ve never been able to. But now they have an opening, and we now have a president who at least said during the campaign he wouldn’t cut these programs, but he’s putting people in place who will. And it’s really… and, in fact, Speaker Ryan, right out of the block said he wants to take Medicare up in January as part of getting rid of the Affordable Care Act. Nobody voted to destroy Medicare, so there’s a bait-and-switch going on. But that is exactly what appears to be about to happen in 2017.
KIM BROWN: Well, Congressman Price has long held the position that he wants to limit federal Medicare spending by giving the states block grants, and Donald Trump has also said that he is supportive of the idea of block grants. Nancy, is this a bad idea? And if so, tell us why.
NANCY ALTMAN: It’s a terrible idea. There are two ideas. One is to block grant Medicaid, and the other is to turn Medicare, ironically, into Obamacare, instead of a government-provided, government-guaranteed program, they want to change it so all they do is they give seniors and people with disabilities some money and say, “Go out in the private sector and find some insurance for yourself.” That just doesn’t work.
It’s a way to make the federal government’s balance sheet look better, because both of these are expensive programs. They’re expensive not because they’re inefficient. They’re extremely efficient. They’re expensive because healthcare costs, private as well as public, are rising astronomically high, and we need to control healthcare costs in the private sector as well as in the public sector.
We shouldn’t be shifting costs and what the block rated Medicaid and turning Medicare into Obamacare does, is it shifts costs from the federal government, in the case of Medicaid, to the states, and in the case of Medicare, to seniors and people with disabilities.
KIM BROWN: Talk to us about some of Congressman Price’s affiliations. Because one person that he will be working with as Secretary of Health and Human Services is an individual named Seema Verma. Trump picked this person to run the Centers for Medicare and Medicaid Services, and she has a bit of an interesting background when it comes to privatization of healthcare.
NANCY ALTMAN: Yes. Despite his rhetoric in the… talking about Donald Trump, despite his rhetoric in the campaign, he’s surrounding himself with people who are hostile to Social Security, Medicare and Medicaid. We can start with his Vice President. Mike Pence is on record against all of these programs. He has advisors who have come out against them. And now it looks like, well, the announced nominee for Secretary of Health and Human Services, Tom Price, and the head of the Centers for Medicare and Medicaid programs, are both, along with Speaker of the House, Paul Ryan, both have had their eye… have wanted to end Medicare as we know it – all of them, I should say, have wanted to end Medicare as we know it for a very long time.
The transition team people he has looking at the Social Security Administration and they have an important part of Medicare. They are all privatized use, as well. And we don’t even have to imagine it, because Speaker Paul Ryan has already said that he wants to take up Medicare along with the Affordable Care Act, so-called Obamacare. And President Trump’s spokesperson has said that Trump will look at Paul Ryan’s alternatives, which is Washington-speak for, “Hey, I’m gonna go along with you, but I don’t want to say it because that’s not what I ran on, and that’s not what the American people want.”
KIM BROWN: Well, Nancy, I want you to paint a picture for us, because, as you mentioned, President-elect Trump and some of the appointments that he’s making are all individuals who are seemingly very hostile towards entitlement programs, and we’ve heard this sort of overarching theme consistently from Republicans about people being on the government dole, or on the government teat. But when we talk about privatizing these programs, Social Security, Medicare and Medicaid, what would the privatization of these systems look like for the 130 million Americans who rely on these benefits?
NANCY ALTMAN: An excellent question. Before I answer it, let me talk about some language embedded in your question, which has become common in Washington, but it should raise antennas: and that is that Medicare and Medicaid are earned benefits. They are benefits that people have paid for, have worked for, and have earned. Back in the 1990s, those who Paul Ryan and others, who’ve been against Social Security, have subtlety changed the language to call them “entitlements”, which sounds like government handouts, and talked about “Makers and Takers” and all of that sort of thing. These are programs that are earned benefits and Medicaid is a program for the lowest income and most vulnerable people around us.
What they would do, they would basically end all three programs. Social Security provides basic wage insurance when wages are lost in the event of death, disability, or old age. It’s been around for 80 years. It works extremely well. It’s extremely efficient. What they would do is, instead of money to pay for these guaranteed benefits – these are benefits you’re entitled to a percentage of your wages if you become disabled or died leaving dependents, or you reach old age – you’re entitled to a percentage of your benefits for the rest of your life. You cannot outlive Social Security, even if you live to 120.
What this privatizing means is, instead of setting the money aside and putting it in a trust fund in the government and having these guaranteed benefits, it would be invested in the stock market and you’d have the ups and downs of the stock market, all the risks, and if you run out of money, that’s your problem. You’re on your own. That’s Social Security.
Medicare right now, you sign up, you’ve got your card, you’ve earned it your whole working life. You go to a hospital, you go to your doctor, you present the card, and the costs are paid for. What this would do is the federal government would say, “Here’s some money, go out on the market and go talk to all these various insurance companies and figure out what you want.” Now, before Medicare was enacted, that’s what we had, except without the government subsidy. What seniors found and people with disabilities, where that most people couldn’t afford the insurance and when there was insurance, it was three or four times what other people paid. It is very expensive to cover these groups, and so forcing people just to go out to the market themselves is not going to work.
The third is Medicaid, and they talk about block-granting that. That now is partly paid by states and partly paid by the federal government. This would shift all the money to the states. The federal government has borrowing authority. Most states do not. So, this would mean that the states would be limited in how much they could spend, and the lowest income people would probably find that they were not able to afford the essential healthcare they need.
KIM BROWN: So, Nancy, this is not the first time that a Republican president has at least spoken or floated the idea of the privatization of Social Security, Medicare and Medicaid. Bush 43, President George W. Bush, made this a priority of his second term and in 2005 this is a campaign that he really embarked upon. And once he began to do that, that seemed to be a rallying point for congressional Democrats who stood uniformly against what President Bush was proposing at the time. And it sort of sent the Republicans in a bit of a tizzy and it drove his disapproval ratings upwards because most Americans don’t really want their Social Security privatized.
So, why did what President Bush try to do in his efforts to privatize these programs, why did it fail?
NANCY ALTMAN: Well, excellent question, and I think it’s going to be harder this time around. But let me answer why it failed. The American people are polarized about many issues but Social Security, Medicare and Medicaid, they are not. People will… poll after poll shows, whether you’re a Tea Partyer, or whether you’re a union member, in the household, whether you’re old, young, in the middle, that you understand that Social Security is incredibly important and more important than ever.
People who have… seniors who now are receiving Social Security understand how valuable it is. So when President Bush sought to privatize it, it was not like weapons of mass destruction in Iraq or something else. When the American people really had no way of knowing whether it was a good or bad idea, or whether it was accurate or not, this was one where everybody knows you’ve seen Social Security coming from your pay check, you know people who are receiving the benefits, and it’s a known commodity.
President Bush to his credit went around the country trying to sell his proposal, and everywhere he went he was met with opposition. And indeed, as you correctly said, even though there were Republicans control of the House and Senate, it never even got a vote, and really started to be the end of President Bush’s popularity.
The reason I say it’s different this time is, unlike President Bush, who went around and sold it, which is the right thing to do – we are a democracy – the Republicans Paul Ryan, Tom Price and perhaps Donald Trump, are going to try to do this in, kind of, the stealth of night. They’re talking about… first of all, they’re lying about it. They’re saying that it has to be done because of the Affordable Care Act. That is nonsense. The Affordable Care Act had very little to do with Medicare. And to the extent there were Medicare provisions, it actually increased the funding for Medicare, so quite the opposite of what’s being talked about, and they’re talking about. But the other thing they’re planning to do is use an arcane process known as reconciliation, which goes through a very fast, limited debate, no chance to filibuster, and so they can ram this thing through without the American people even knowing it’s happening.
This is why I’m so pleased that you are having this show and that you’ve invited me on, because they’re talking about perhaps as early as January and certainly within 2017. People who care about these programs have to know that this is going on.
KIM BROWN: So, Nancy, as you mentioned what the congressional Republicans and possibly, President-elect, Donald Trump plan to do is to make this a thing in the dead of night with limited public scrutiny available. What can the American people do to try to ensure that that doesn’t happen? Are there any recourse besides the obvious of reaching out to your public officials. I mean, how else can the American people pressure Washington to make sure that this is not rammed through, as you say?
NANCY ALTMAN: Again, wonderful question. Our organization, Social Security Works, is going to be working around the clock every day on this issue. We’ve already started. If people want to go to our website, which is Socialsecurityworks.org, we have a petition about, Hands Off Medicare, and indeed, are going to be delivering it on December 7th, with Minority Leader Chuck Schumer in the Senate, Nancy Pelosi, Minority Leader of the House, Senator Sanders, Senator Warren, others. The Democrats are already on high alert about this.
So, if people go to our website, they can sign the petition, it will get delivered to Speaker Ryan and the President-elect Donald Trump, and it will… and they can also sign up for emails that will keep them posted on things that are going on. It’s very important to call your representatives and senators, it’s important to write letters to the editor, and it’s also important simply to talk to your friends and neighbors, urge them to go to Social Security Works or other websites to find out what is going on, and to join the fight. Because this is one where the American people are united. No one voted on these issues. They voted on many other issues including Obamacare, but not on Medicare, not on Medicaid, and not on Social Security. They should know that these are in jeopardy and people need to speak up.
KIM BROWN: We’ve been speaking with Nancy Altman. She is the founder and co-director of Social Security Works, and she’s also the author of The Battle for Social Security: From FDR’s Vision to Bush’s Gamble, and she’s co-author of Social Security Works: Why Social Security Isn’t Going Broke, and How Expanding It Will Help Us All. Nancy, we appreciate your expertise today. Thanks a lot.
NANCY ALTMAN: Thank you so much.
KIM BROWN: And thanks for watching The Real News Network.