How President Obama’s administration handles the so-called “fiscal cliff” will provide Americans with a window into how the president plans to govern in his second term.

If Obama agrees to make cuts to Medicare, Medicaid and Social Security in exchange for getting enough Republicans to break with tradition and agree to tax increases on the wealthiest Americans, then it will be obvious he has no plans to shake things up in Washington.

Most Americans, including even conservatives and Tea Party types, oppose cuts in Social Security and Medicare. Furthermore, Americans also generally have supported raising taxes on the wealthiest Americans. So while the entitlement cuts-for-tax increases compromise would represent a bipartisan agreement of sorts, it would be a bipartisan agreement between the elites with the rest of America left to unhappily watch from the sidelines.

One strategy aimed at ensuring the solvency of Medicare and Social Security that has received attention in the media is to raise the Social Security retirement age and the age of eligibility for Medicare. Since Americans are living longer than when these programs originally were designed, the reasoning goes, than it makes sense to make the elderly wait a little longer to receive their benefits.

The major flaw in such a line of thinking is that while it’s true Americans are living longer, life expectancy gains have been mostly relegated to affluent and educated Americans. For lower-income Americans, life expectancy hasn’t increased all that much. It makes little sense to punish retired construction workers because doctors are living longer.

While Social Security doesn’t pose as big a threat to future budgets as is often advertised, the same can’t be said of Medicare. But raising the eligibility age requirement isn’t the remedy to what ails this program. The high cost of Medicare — and Social Security and Medicaid for that matter — is directly related to America’s costly health care system.  

One way to curb health care costs would be for the government to rethink the way it finances drug research. Prescription drug companies today are provided a temporary monopoly by the government for bringing new drugs to market. The problem with this patent-monopoly system — aside from restricting important knowledge — is that the companies often charge prices above the cost of production. These high costs are a burden for people of modest income, not to mention people in Third World countries — and some people right here in the U.S. — where access to drugs can be a life or death issue.

Joseph Stiglitz, a Nobel Prize winning economist, has proposed an alternative approach. While he doesn’t endorse doing away with patent-drug research altogether, he encourages the development of a medical prize fund in which the government would reward the biggest prizes to developers of prevention and treatments for the most debilitating diseases.

U.S. Sen. Bernie Sanders, I-Vt., has proposed setting up such a prize system to support research on AIDS drugs. The system, which has been endorsed by Stiglitz, would set up a $3 billion-a-year prize fund to buy out future patents for AIDS drugs. Dean Baker, cofounder of the Center for Economic and Policy Research, wrote in the Huffington Post that the companies and researchers would be compensated for their work and the patents then would be placed in the public domain where they could be sold as a generic in the free market at a much lower cost — some generics as little as $5 to $7 per prescription.

Bringing down the cost of health care can be done in a morally acceptable and economically feasible way that will prevent deep cuts in popular programs and lead to better health outcomes for millions of people.

Andy Heintz is a political commentator. He previously was a Herald staff writer, now a sports reporter at the Ottumwa Courier, Ottumwa, Iowa. Read his blog at