Krugman: Budget proposals 'only considered serious if you inflict pain on vulnerable people'

Nobel Prize-winning economist Paul Krugman on Tuesday said it was "unfair" to accuse President Barack Obama of not putting forth serious reforms to Medicare amid the fiscal cliff negotiations.

Krugman noted on PBS' Newshour that Obamacare seeks to reduce Medicare costs without affecting eligibility or benefits. The law is estimated to have provided $716 billion in savings by reducing payments to hospitals and insurers.

"He's actually done more to bring down the cost curve for Medicare than anyone has ever done before," Krugman remarked. "But in Washington, that is considered not serious because he's not actually taking benefits away from people who need them. So, it's a really weird thing. It's only considered serious if you inflict pain on vulnerable people."

Republicans have proposed reducing the cost of Medicare by raising the eligibility age. Currently, Americans can enroll in Medicare when they turn 65. Some Republicans have proposed increasing the eligibility age to 67 or 68.

But Krugman said that proposal wouldn't bring much savings, because most seniors between 65-68 years old are relatively healthy.

"It makes almost no difference to the financial outlook," he said. "But it's cruel."

Krugman said it was wrong to focus on Medicare and Social Security to reduce the federal deficit.

"All of these things that have occupied all our attention are not actually where the big bucks are. The big bucks are in making high-income people pay higher taxes and in actually addressing health care costs, which the Affordable Care Act does and none of the things that we're talking about now will actually do."