Given the state of the economy, gas prices, baby formula shortages, inflation across the board and a disruptive two-year pandemic, favorability towards Washington leaders is unsurprisingly low. President Biden and the Democrats’ approval ratings are the lowest for any President in history at just 38%, according to the latest Gallup Poll. This is why, understandably, elected officials want to return home before the midterm elections with some good news to curry favor.
The Inflation Reduction Act was named for this very reason. It includes new spending to extend Affordable Care Act subsidies, which are otherwise set to expire in October just before a large block of voters head to the polls. To help pay for these subsidies, the bill includes new taxes and Medicare prescription drug reform that lawmakers characterize as "savings" for seniors. The problem is it is hugely unpopular to rob Peter to pay Paul, heralding savings for Medicare on one hand, while neglecting the impact of reduced innovation and development for medications on the other. Moreover, it is unfavorable to reallocate Medicare savings to pay for new spending such as the Affordable Care Act subsidies and green energy policies. Regardless of where lawmakers fall on this approach, a majority of voters oppose this spending plan.
While drug reform on its own polls favorably when presented as a potential savings for seniors, these numbers swing considerably when tied to legislation that includes more government spending, and specifically to pay for the extension of Affordable Care Act subsidies. This is why these purported Medicare savings in the long run will, actually, become cuts to the program. Some argue this is not really cutting Medicare, but the numbers are revealing. Just last week, Senate Democrats released a fact sheet that outlines where the revenue comes from to finance the new spending. And the “cuts” are not sitting well with voters.
A survey for the American Prosperity Alliance, conducted by OnMessage, Inc., found that constituents across four key states, Georgia, Nevada, New Hampshire and West Virginia, are expressing their frustration with the current leadership in Washington. The samplings, taken between July 14 – 20, focused on incumbent leaders in Washington and their lack of standing with voters, the talk of increased government spending during an inflationary period in this nation, and the plan to divert Medicare savings to “invest” elsewhere.
It is no surprise that 70% – 80% of those surveyed feel the nation is on the wrong track, and 53% - 67% are staunchly opposed to government spending in the midst of a recession.
The poll also found that 69% in Georgia, 54% in Nevada, 71% in New Hampshire and a staggering 80% in West Virginia are less likely to support the Inflation Reduction Act after learning it cuts $300 Billion from Medicare. In every state, more Democrats said they were less likely to support the bill knowing this caveat.
Now here’s where we get to the crux of the matter. When voters were asked if they would approve of Medicare defunding in order to pay for the deficit in the Obamacare subsidy program, the answer was no in Georgia (59%), no in Nevada (56%), no in New Hampshire (66%), and a resounding no in West Virginia (73%).
The landscape does not bode well on the math front for the Inflation Reduction Act. The calculations from economic modelers, such as Moody’s Analytics and the Penn-Wharton Budget Model, starting to emerge suggest the bill will have a minimal impact on the overall U.S. economy. But, during a time where there has been a concerted failure to address the rampant inflation plaguing America, congressional leaders and the Biden administration seeking a public relations message victory ahead of the midterm elections now want to raise taxes, fund Green New Deal-style policies, and give billions to the IRS.
From lawmakers to voters, many agree that Medicare reform is necessary. However, an unpopular reallocation of Medicare savings to pay for the expansion of what some view as a failed universal healthcare program or other new government spending is not the answer. It is a risky move no matter how politically expedient it may appear to lawmakers seeking reelection.
Although some senators are feeling optimistic, it might not be a safe bet for elected officials despite how many of them would like to return to their districts this month and claim victory. The big question now…is anyone paying attention?