Making sense of Medicare cuts

I was watching the countdown to passage of PelosiCare, hosted by Geraldo Rivera, with a running commentary by Michael Steele, chairman of the Republican National Committee.

Something Steele said caught my ear and reminded me of a TV ad that was airing a few weeks ago. He said that Medicare is bankrupt and the Democrats’ plan will cut $400 billion out of it. He went on to say that that doesn’t make any sense.

On August 24, 2009, Steele wrote this in a Washington Post op ed: “But [the president] and congressional Democrats are planning to raid, not aid, Medicare by cutting $500 billion from the program to fund his healthcare experiment.”

I’m not sure why the $100 billion difference between his two statements, but these days it’s considered chump change anyway.

In the ad that ran recently, Dr. Ami Siems used a similar line: “Washington already controls Medicare and Medicare will be bankrupt in eight years. Despite this looming bankruptcy, some want to pay for health care reform with $500 billion in Medicare spending cuts.”



Let’s step back for a minute and ask ourselves what is being said here. Steele and Siems are arguing that reducing expenses of a program that is headed for bankruptcy doesn’t make sense.

Did I miss a class when I was in business school? I always thought that cutting expenses was essential for a company heading into bankruptcy. Hopefully, with enough cutbacks and restructuring, a company could avoid a bankruptcy altogether.

Apparently, all logic and common sense gets turned on its head when dealing with the government. Or should I say politics?

Copyright 2009 Randy Hunt