Obama floating cuts to Big Three social programs

The Financial Times reports that President Obama is going to propose cuts to Medicaid, Medicare and Social Security as part of his deficit reduction proposal.

Barack Obama is expected to lay out a plan next week that would cut several hundred billion dollars from Medicare and Medicaid, the large government healthcare schemes for the elderly and the poor, as part of a pitch to cut future deficits by more than $1,500bn.

Senior White House officials said the US president would base a detailed blueprint for fiscal reform, which is to be delivered on Monday, on an earlier speech he delivered in April on deficit reduction.

The announcement could create tensions within the Democratic party, which has traditionally staunchly defended Medicare. Mr Obama’s fiscal proposal will be released just one week after the president unveiled a separate plan to raise more than $450bn to pay for a jobs bill that senior officials said would be the president’s singular focus in coming weeks.

Mr Obama’s plan could also feature a change in the way the US government measures inflation, switching to a less generous chained-consumer price index. The biggest impact of this measure – which could save between $250bn and $300bn over ten years – would be felt by recipients of Social Security, the retirement scheme.

Obama announced in his jobs speech that he would seek cuts to Medicaid and Medicare, so while that isn’t really surprising, it’s still incredibly disheartening. Cutting Social Security’s COLA benefits is also really destructive.

If a Republican president proposed cuts to Medicare, Medicaid and Social Security, the outcry and opposition from liberal groups would be defining. Democratic members of the House and Senate would fight tooth and nail to stop the cuts. Labor would turn out their members to protest the cuts. The airwaves would be flooded with ads hitting Republicans for this assault on the social safety net and online advocacy groups would bombard the White House with calls, emails, and faxes from outraged members.

But when the cuts are proposed by a Democratic president, the odds of this response seems radically reduced. Labor unions were universally supportive of the President’s jobs speech, praising him for turning towards job creation and infrastructure investment. I don’t hold out hopes that there will be an equally swift outpouring of statements criticizing Obama for trying to pay for tax cuts by cutting Social Security, Medicaid and Medicare.

There are obvious electoral problems with a Democrat leading the charge to cut the Big Three programs. It’s a Nixon going to China moment, only this time it’s a bad thing. But more importantly, these cuts will have a devastating human affect. These are programs that keep people out of poverty. These programs care for sick people. They are crucial to maintaining a middle class in America. The idea that we have to cut these programs to “save” them was treated as a laughable oxymoron by progressives laughed when Republican politicians said it. If Obama goes ahead with these proposals, he should face the exact same response from the left as his ideological predecessors in the Republican Party received.

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