Obama’s Disingenuous Medicare Pledge

Part of President Obama’s joint session of Congress speech was intended to calm the legitimate fears of Medicare beneficiaries that his so-called “reform” would be funded by curtailing their medical services:

More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan.

This was a deliberate deception.   Obama knows the so-called Medicare trust fund is a sham, that it doesn’t exist.

ObamaCare

For decades Social Security and Medicare payroll tax revenues coming into the Treasury have been greater than payouts for social security and Medicare benefits.   Congress has always spent the difference, called “surplus,”  on everything else government funds.

On paper there are Social Security and Medicare “trust funds,” but they hold no cash.  Congress directs the Treasury Department to maintain ledgers supporting the fiction that these two  programs are somehow owed the billions in surplus revenue that was spent on other programs since the Seventies.  The paper trust funds exist only to support the illusion that the government owes Billions to itself.

Beginning this year Medicare tax revenue will be less than Medicare payouts, transforming Medicare from a source of “surplus” for Congress to spend on other programs, to a net drain on the Treasury.  To make up the difference Congress will have to appropriate money from other sources.   There are only three ways for the government to acquire the cash to meet the Medicare shortfall:

• Increase taxes,
• Cut spending somewhere else
• Borrow more money from investors, including foreign governments

These are the same three options government would have if there were no on-paper trust fund.  Thus, the trust fund is proved to be political fiction created to dupe Americans into believing money was being “set aside” to fund the future needs of Social Security and Medicare.

Obama’s promise that “not a dollar of the Medicare trust fund” would be spent to support “The Plan” was meaningless.    Seniors who paid the Medicare tax all their lives in exchange for the promise of Medicare benefits are concerned about the real question: will Congress reduce Medicare benefits to fund other parts of ObamaCare?  If you read the legislation and believe your lying eyes, the answer is yes.

The lesson in all of this is that Congress should not be allowed to enact Unconstitutional programs like Medicare, that inevitably become financial time-bombs.   Working Americans now face the impossible financial burden of tens of millions of seniors who are or soon will be eligible for Medicare and have been taxed all their lives to pay for the promise of  health care.  There’s no way to extricate America from this moral and financial trap without causing a great deal of pain.

What’s Obama’s solution?  Expand government’s health care burden and make the same unsustainable promise not just to seniors, but to everyone!   And fund the new program in part by breaking the Medicare promise of the past 44 years.