The Democratic co-chair of President Obama’s fiscal commission now says Democrats should entertain an increase in the Medicare eligibility age — thanks in part to Obama’s own health care law.
At a hearing before the deficit Super Committee, former Clinton White House Chief of Staff Erskine Bowles argued that the Affordable Care Act should allow Democrats to accept raising the Medicare eligibility age, because it creates a system of subsidized, guaranteed private health insurance for people who don’t qualify for government programs like Medicare and Medicaid. And he outlined a plan — framed as a pitch to Democrats — that would total nearly $4 trillion in deficit reduction over 10 years, including a higher Medicare retirement age.
“As I have thought about it…under the Affordable Health Care Act we provide subsidies for people who have really chronic illnesses and people who have limited incomes so they can afford health care insurance in the private sector,” Bowles told the panel during an exchange with Sen. John Kerry (D-MA). “And that didn’t exist before the Affordable Health Care Act. That means that people 65, 66, 67 will still be able to get health care insurance. So as I think about it I could support raising the health care age for Medicare since we have other coverage available under the Affordable Health Care Act.”
In private budget negotiations earlier this year with House Speaker John Boehner (R-OH), President Obama entertained the same idea — a slow increase in the Medicare retirement age — provided Boehner find votes for over $1 trillion in new revenues. The discussions quickly fell apart.
The proposal infuriates progressives, and other defenders of single-payer Medicare, who note that the proposal is regressive — hitting elderly minorities and poor people who have lower life expectancies hardest — and shifts costs on to seniors, states, employers, and other federal programs. And it doesn’t save much money.
Bowles included the proposal in a rough proposal he laid out for committee members that, combined with the cuts Congress has already passed, would total $3.9 trillion in deficit reduction.
“If you look at where I understand the two sides now stand…You all are between $250 and $400 billion in additional cuts on discretionary, so I assumed that we could reach a compromise of an additional $300 billion discretionary spending cuts,” Bowles said. “On health care you are somewhere between $500 and $750 billion of additional health care cuts. I assume we can get to $600 and I got there by increases in the eligibility age for Medicare…. On other mandatory cuts you’re somewhere between $250 and $400, so I settled on $300 there.”
Bowles also proposed $200 billion in savings by changing the way the government calculates inflation to a less generous measure called chained CPI. That would reduce seniors’ Cost of Living Adjustments under Social Security, among other government benefit cuts, and provide the Treasury new revenue by slowing the rate at which tax brackets rise. That would push workers into higher brackets sooner as they climb the income latter — a de facto tax increase over time.
For Democrats, he asked Republicans to accept $800 billion in new tax revenues.
Add in $400 billion in 10-year savings on interest payments on the debt, and over $1.3 trillion in 10-year savings from cuts Congress has already passed, and that adds up to $3.9 trillion.
If you think this is an offer Republicans couldn’t possibly refuse, think again. Committee co-chair, Rep. Jeb Hensarling (R-TX) cautioned Bowles in his closing remarks, “You’ve certainly created some excitement for the press I think. I would say don’t necessarily believe everything you read and hear about the proceedings of this committee.”
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.