Reality Check: Obama Cuts Social Security and Medicare by Much More Than the GOP

The Atlantic

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The president's budget doesn't cut entitlements enough. That's been the unison response from Republicans since Obama released his plan yesterday. A brief sampling:

  • Here's Sen. Mitch McConnell: "If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes."
  • Here's Sen. Mike Johanns. "I don't believe the budget proposal went far enough."
  • Here's Sen. Saxby Chambliss: "It is nowhere near what we need to do." 
  • And here's Paul Ryan to ABC News: "I don't know if I would say that he cracked the door on entitlement reform. He has proposed to change a statistic, which saves money. That is really not entitlement reform."

From these quotes, it's easy to get the impression that the president hasn't met Republicans half-way with his cuts to Medicare and Social Security, the two biggest entitlement programs. In fact, he's exceeded them. The president's budget would spend less on both Medicare and Social Security than Ryan's GOP plan over the next ten years.

On Social Security: Ryan didn't cut Social Security by a penny. The president has proposed cutting the program's spending by $130 billion, by adopting a slower-growing measure of inflation.

On Medicare: Ryan's budget kept Obamacare's Medicare cuts and added another $127 billion. His budget projects $6.74 trillion in Medicare spending between 2014 and 2023. Obama cuts even deeper with $380 billion in cuts below his baseline, and his budget projects $6.67 trillion in Medicare spending over the same period. Upshot: Obama's ten-year Medicare budget is $70 billion below the GOP, and his announced cuts are about $250 billion deeper than the GOP. (See below for brief explainer on differences.*)

In fact, as Michael Linden at the Center for American Progress (who helped me with many of these numbers), pointed out, Obama's new proposal would mean about $1 trillion in lower Medicare spending in this decade compared to projections from before he took office. That includes the effects of slowing health-care inflation after the Great Recession. That's a 13 percent reduction!

Two questions I can anticipate.

(1) If the GOP isn't cutting Social Security and Medicare (and they're certainly not cutting defense), what are they cutting? Everything else, really. Obamacare gets demolished, and Medicaid (which, to be fair, is considered an entitlement), income-support for the poor, and non-defense discretionary all get the guillotine.

(2) Have I forgotten about Ryan's Medicare reforms after 2023? Nope. But I don't understand why, in 2013, it's considered reasonable, brave, or admirable to propose a dramatic and radical Medicare change that won't take effect for another ten years. That's seven years after Obama has left office. It's not for another two presidential election cycles plus another midterm. I'd rather talk about what these budget plans for this year, and this decade.

And here's the bottom line: Obama preserves federal Medicaid spending, he doesn't unwind Obamacare, and he spends much more on mandatory and non-defense discretionary programs than Ryan proposed. But his cuts to Social Security and Medicare combined are somewhere between $200 billion and $380 billion deeper than the GOP budget. On these programs there is no room to "compromise." The president is already to the right of the right.

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* It's hard to compare these numbers perfectly because they're operating off different baselines. The GOP budget uses the CBO baseline. The White House budget uses the OMB baseline. The baselines are close, but there are subtle differences, because not every budget analyst in Washington agrees on the exact same inflation and wage growth projection (which affects Social Security) or health-care cost growth projection, which affects Medicare.





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