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No Payroll Tax, No Social Security -- And That's The GOP Scheme

By the time you read this, President Donald Trump's latest economic stimulus plan may be largely forgotten. But it has revived an unpleasant idea that the right fringe has been peddling for years: killing Social Security and Medicare.

We speak of an executive order that would cut payroll taxes. Payroll taxes fund virtually all of Social Security and much of Medicare. Without this money, Americans would have neither.

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Trump Vows To ’Terminate’ Funding For Social Security And Medicare

Reprinted with permission from Alternet

President Donald Trump said over the weekend that if re-elected, he will "terminate" the taxes that finance Social Security and Medicare. Advocates of the popular federal programs took that remark as proof of their warnings over many months about Republican plans to sabotage and defund them -- beginning with the White House scheme to "suspend" payroll taxes in the name of pandemic relief.

Defying constitutional prohibitions, Trump announced that he had signed executive orders to bypass Congress in their dispute over a new relief bill, which included his unilateral decision to cut $200 weekly from the emergency federal unemployment supplements of $600 passed by Democrats, He called the order a payroll tax "holiday -- and while those taxes will eventually have to be repaid, Trump said he would make the cut permanent. Experts noted that this policy would bankrupt the Social Security and Medicare systems.

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After 55 Years Of Medicare And Medicaid, Let’s Expand Those Systems, Not Cut Them

This article was produced by Economy for All, a project of the Independent Media Institute.

On July 30, 1965, President Lyndon B. Johnson signed Medicare and Medicaid into law. This crowning achievement was both the culmination of a decades-long effort to attain guaranteed universal health insurance and the first step in the quest for Medicare for All.

In the 55 years since the legislation was signed into law, both programs have proven their worth. Before Medicare, about half of seniors lacked health insurance. They were an illness away from bankruptcy. Today, 99.1 percent of Americans 65 and older are insured, thanks to Medicare. Nine million people with disabilities who are under age 65 also have health insurance coverage through Medicare.

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Why The Drug Industry Can Still Gouge Us

To be American is a wonderful thing most of the time. There are moments, however, when it is downright humiliating. Can you imagine a more pitiful scene than a busload of Americans traveling 815 miles from Minneapolis to a Walmart in London, Ontario, Canada, to buy insulin at a 10th — a 10th! — of the price charged in the United States?

Dollar-wise, the difference is not modest. In the U.S., one vial of insulin costs around $300. In Canada, it’s $30.

From 2012 to 2016, drugmakers nearly doubled the U.S. price of a medication that was invented almost a century ago. Type 1 diabetics saw their yearly insulin costs soar from about $2,900 to about $5,700. Deb Souther, a woman making the trip, said that even with insurance she’s been paying $700 a month for this essential medicine.

We’re not talking about a take-it-or-leave-it product. These are not lawn chairs or T-shirts, which, in any case, are manufactured by numerous companies competing for your consumer dollar. We are talking about insulin, a lifesaving drug for diabetics produced by three companies.

We’re talking about lives. Diabetics who’ve been cutting back on their prescribed insulin because they couldn’t afford it have been dying as a result. One was Alec Smith, who, after aging out of his mother’s health insurance plan when he was 26, rationed his insulin, assuming he could survive until he saved money to buy what he needed. He was found dead in his apartment.

We might ask how the pharmaceutical industry gets away with extorting Americans with its your-money-or-your life demands. The answer is that other countries negotiate with the drugmakers to set reasonable prices. Republicans in Washington, on the other hand, have served the American public to them on a silver platter.

The American government is not allowed to negotiate, with one notable exception. The Department of Veterans Affairs obtains deep discounts on drugs through direct negotiation. By contrast, the Republicans’ Medicare drug benefit of 2003 specifically bans the U.S. government from bargaining on prices for medications.

If Medicare Part D, the drug benefit, were to pay prescription prices similar to what the VA pays, Medicare would enjoy a savings of about 44 percent on the top 50 oral drugs, according to an analysis published in JAMA Internal Medicine. In dollar terms, the savings in 2016 would be over $14 billion.

When President Trump campaigned in 2016, he vowed to have the government negotiate on Medicare drug price. After the election, the promise vanished.

Right before the 2018 midterms, Trump suggested a modest plan whereby Medicare Part B — the part covering drugs administered by doctors and hospitals — would use an International Pricing Index as a benchmark for setting prices. With a presidential election looming, Trump seems to be reviving that kind of talk again.

Of course, this is just more pre-election trickery. Even so, some Republicans expressed alarm at the very idea, calling it government “price controls.” They apparently prefer that drug companies control the prices.

Trump’s secretary of health and human services happens to be Alex Azar, a former Eli Lilly executive. Lilly’s Humalog pen is seen as one of the villains in insulin price gouging.

Azar has diverted blame to socialism. “The American senior and the American patient have been too long been asked to overpay for drugs to subsidize the socialist systems of Europe,” Azar charged.

And who’s been asking — no, forcing — the American people to pay so much? The drug industry and it’s (mostly) Republican enforcers.

Americans lining up at a Canadian Walmart prescription drug counter to buy lifesaving drugs at a 10th the U.S. price must have been a pathetic sight. Only a change in Washington, starting with the White House, will end the outrage.