Americans are about to choose among candidates who are debating whether to cut benefits for Social Security, Medicare and Medicaid and whether the richest Americans should pay their fair share of taxes.
Former Gov. Mitt Romney’s plan to turn Medicare into a voucher program and increase health care costs for seniors is a deciding issue in key battleground states and for key electorates. Another deciding issue is the scandalously low tax rate that people like Romney get away with paying.
Meanwhile, a bipartisan group of senators who are not up for reelection is working behind closed doors in Washington to reach a so-called grand bargain that completely bypasses this debate and ignores the views of voters.
What is the grand bargain? It boils down to lower tax rates for rich people — paid for by benefit cuts for Social Security, Medicare and Medicaid. These are precisely the issues that are being debated so vigorously in the campaign, and voters do not want anything to do with such a deal.
The pundits will tell you that Democrats have no choice but to accept Social Security and Medicare benefit cuts — because this is the only way Republicans will agree to more tax revenue. This is the grand bargain.
We could not disagree more.
When I hear people say we need to cut Social Security benefits, I wonder whether they know that millions of people lost their retirement savings in the Great Recession and that traditional pensions are increasingly hard to come by. Do the benefit cutters think seniors are sitting around wondering how to spend their lavish retirement benefits — now averaging the princely sum of $14,500 per year? Do they think near-seniors are suddenly realizing that their savings and pensions are much more secure than they had ever imagined possible? Are the people who want to raise the retirement age aware that life expectancy for Americans who lack a high school diploma is actually declining? Do they understand that raising the retirement age is a benefit cut, no matter what age you retire?
Of course we have to bring down health care costs, but not by cutting benefits and not by shifting more costs to individuals. The right way to bring down health care costs is to make our health care system more cost effective, stop overpayments for care and reform the way we deliver and pay for care. For example, allowing Medicare to negotiate lower drug prices from the big pharmaceutical companies would save a lot of money — but Republicans have blocked this at every turn.
The grand bargain crowd says we have to cut benefits to lower the deficit. But if they were serious about reducing the deficit, they would not propose to lower the top tax rate for the richest Americans, which wastes trillions of dollars. If you want to cut benefits for working Americans while cutting the top tax rate for the richest Americans, it is abundantly clear which side you’re on.
Earlier this month, Sen. Chuck Schumer (D-N.Y.) said something courageous. He said we cannot afford to lower the top rate below where it was when Bill Clinton was president — 39.6% — even if we close tax loopholes. Cutting tax rates for the rich won’t help with the supposed goal of reducing the deficit, and it will exacerbate economic inequality — the last thing we need.
The reaction to Schumer’s speech proves there is nothing in the grand bargain for working people. Republican leaders said no grand bargain is possible without lowering the top tax rate for the richest Americans. What they really have in mind is extending tax cuts for the richest 2% of Americans, at a cost of $1 trillion, and then increasing taxes on the middle class. In return for “generously” offering up higher taxes on the middle class, they think Democrats should agree to benefit cuts for Social Security, Medicaid and Medicare.
This deal stinks to high heaven, which is precisely why it is being negotiated behind closed doors. We say no to secret deals. Let’s have this debate out in the open. Do you think the American people really want to cut benefits for Social Security, Medicaid and Medicare in exchange for lowering the top tax rate for the richest Americans? I don’t think so.
Richard Trumka is president of the AFL-CIO. The column, which appears today at Politico, is crossposted here with the author’s permission.