What did the government standoff have to do with Obamacare? I’ve been in Canada for much of this month on a fellowship to look at Canadian healthcare and discuss US reform efforts, and that’s the question Canadians have been asking me. Why would politicians shut down the government over providing health insurance to Americans who had none (something Canadians believe is a matter of right)?
An answer: Obamacare was small fry for the much bigger fish Republicans had hoped to catch—cuts to the federal budget, including trims to Social Security benefits and means testing for Medicare. CNN’s October 17 interview (embedded below) with Maine Independent Sen. Angus King, about the short-term budget deal that ended the government shutdown, made that clear. King told CNN’s Kate Bolduan, “I think the hidden benefit in this is the instructions to the two budget committees to come together and try to solve some of these fiscal issues.”
King is one of the Senate conferees, and he will be close to any future budget settlement. He was ready with some answers—not all of them clear or accurate—and CNN’s Bolduan failed to clarify what he said, ask for more explanation, or challenge his remarks. In other words, it was more of the same unhelpful back-and-forth we’ve come to expect from TV news.
While conceding that reaching a long-term budget deal was not “gonna be easy,” King told viewers there were elements (in the budgets of GOP Rep. Paul Ryan and the one passed by the Senate in the spring) that can “make a difference.” Then he pulled out a USB drive that he said “is going to become very famous.” It came from a group, he said, called Fix the Debt, and on it were all the options for “getting them [fiscal issues] done.” He instructed viewers to click on an Excel spreadsheet and it “does all the calculations so you can see what the consequences are.” Fix the Debt is a group of elite business CEOs and others who have been working to sell Americans on the need to reduce the deficit. They have a very big dog in that fight. But Bolduan did nothing to explain who the debt fixers are and what story King’s spreadsheet told. Instead she moved into journo conflict mode asking, “Honestly, how are you going to do it when this is at a time when I don’t think anyone’s seen Congress so divided?”
Bolduan continued to let King have his say. King noted Republicans want no new revenues whatsoever, and the Dems are very reluctant about entitlement changes. “Something, some mix of that, most people that have looked at that say is going to be necessary,” King said. That’s the standard debt reduction narrative we’ve heard for the last couple of years. Nothing illuminating for viewers here! Who were these “people” King mentioned? Members of the Fix the Debt crowd? Perhaps CNN viewers might have wanted to know. Instead Bolduan quizzed King again about chances for a deal. She did ask for some specifics. “What should folks be prepared for going into these negotiations?” Then King got down to the nitty-gritty. “There are likely to be some entitlement changes,” he told her, but “not cuts in benefits, but things like, for example, right now on Medicare the tax stops at about $100,000 a year. In other words, you pay zero after that as incomes go up. I think that’s going to have to be fixed.”
What was he talking about? Bolduan didn’t pin him down. Had she done so, she could have told viewers that the payroll tax cap—the amount of tax they pay to fund Medicare’s hospital benefits—was lifted ages ago. What King may have meant was the Social Security wage base on which payroll taxes are levied. That amount this year is $113,700. Given how confused Americans, including Medicare beneficiaries, are about how the program actually works, this kind of misstatement is hardly trivial. Some homework was in order. The logical follow-up question: Was King supporting lifting Social Security’s payroll cap? Some people—those who oppose Social Security benefit cuts by changing the way the cost of living formula is calculated—say raising the amount of wages subject to Social Security taxes fixes the system’s projected shortfall in a way that doesn’t hurt beneficiaries, especially those who rely on Social Security for most or all of their income.