Mediscaring Our Way To Fiscal Meltdown

Volume II, Number 11 September 27, 1996

The news on Medicare is going from bad to worse. In June, Medicare's Trustees moved forward the program's projected bankruptcy date from 2002 to 2001; in August, the Ways and Means Committee released new Treasury data confirming that (in Chairman Archer's words) "Medicare is losing money at a record-breaking pace." Meanwhile, a new CBO report concludes that even the strictest benefit cuts its authors dare to consider won't stop the program from growing far faster than the economy over the next several decades.

The White House should be proposing bold measures to avert fiscal meltdown. Instead, it is running a "Mediscare" campaign that vilifies Republicans for having the temerity to raise an issue that both sides know is Washington's biggest budget challenge.

Shameless Demagoguery

According to the White House spin doctors, the proposed GOP cuts in Medicare are "unnecessary" and "unconscionable." One wonders how the administration squares these charges with the fact that two years ago, in its Health Security Act, it called for larger cuts in Medicare than Congress now proposes. Or that the presumably "conscionable" cuts in the President's latest budget proposal would, over the next six years, leave Medicare spending just 3 percent more than the GOP plan.

The truth is that, when not running for election, Democrats understand that Medicare costs must be controlled. They know that, according to the official Trustees' projections, earmarked tax revenues will cover just three-quarters of Hospital Insurance benefits by the year 2000 -- and that, absent reform, total Medicare spending will double as a share of GDP by 2020 and triple by 2040. No plan now on the table -- not even the "draconian" GOP plan -- comes close to closing Medicare's near-term funding gap, much less to ensuring its sustainability when the Baby Boom retires.

Liberals ought to care about these numbers even more than conservatives, since runaway entitlement spending is on track to crowd all public-purpose spending out of the federal budget. They also ought to be ashamed that the party refusing to face up to Medicare's future is the party that presided over Medicare's creation and expansion. Democrats know full well that the public trusts them more than Republicans to reform Medicare. Yet they are forcing Republicans to go it alone on this issue -- and then bludgeoning them for doing so. This is an abdication of responsible leadership. It's as if Nixon hadn't gone to China so that he could keep bashing liberals for being soft on communism.

A Political Blunder

Yes, Republicans too bear some of the blame. They wouldn't be so vulnerable to Mediscare if they hadn't made the error of insisting on large tax cuts while balancing the budget. Without the tax cuts, the case for fiscal belt-tightening is simple and compelling. With it, Republicans leave themselves open to an obvious challenge: How does your most difficult dollar in Medicare cuts compare with your least necessary dollar in tax cuts?

Embarrassed by such questions, Republicans try to argue that they aren't really "cutting" Medicare at all and that they are only trying to "save" its trust fund. But none of this persuades a skeptical public.

The Toll Bridge

Some pundits take comfort in the fact that Mediscare is a cynical election-year ploy. If reelected, they argue, Clinton will set aside the partisan rhetoric and undertake the reforms everyone knows are essential. Perhaps. But after having poisoned the well, he may not be able to return to it. History is filled with examples of second-term presidents who were supposedly free to act in the public interest, but who turned out to be hemmed in by an overgrown thicket of prior campaign promises.

There is no doubt about one thing. If Medicare costs are not controlled, then Dole is correct: Clinton's "bridge to the future" really will be a toll bridge -- with today's kids tossing their future paychecks into the till.


The Concord Coalition web pages were designed by Marla Parker and Krista Reymann. These pages are now maintained by Craig Cheslog. . Last updated: 24 Apr 1997