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The Heads in the Sand Coalition Strikes Again

Posted By Conn Carroll On July 24, 2008 @ 1:30 pm In Economics | Comments Disabled

Already Medicare expenditures account for 3.2 percent of gross domestic product (GDP). Medicare Part A – the part of Medicare that pays hospital bills – is already spending more in benefits than it gets in revenues and is projected to grow by 7.4 percent on average over the next 10 years. Within the next five years, general revenue transfers are expected to constitute the largest single source of income to the Medicare program [1]. According to USA Today [2], taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs. That’s nearly $500,000 per household.

In 2003 Congress tried to create a mechanism that would force the federal government to take an honest look at controlling the exploding cost of Medicare. The Medicare Modernization Act (MMA) included a provision that required the President and Congress to act whenever two consecutive Medicare Trustee reports projected that more than 45 percent of Medicare’s total costs would have to come from general revenues within seven years. This year’s Medicare Trustee report pulled that trigger. After much deliberation, the White House submitted a proposal that responded to the trigger pursuant to the MMA. But now Congress is refusing to even debate the issue, and they are trying to change the rules so they don’t have to.

Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) told CongressDaily [3]: “We must turn off the trigger and reject Republican attempts to arbitrarily limit Medicare financing. This is nothing more than their effort to turn the program from an entitlement to a voucher.”

Heritage senior policy analyst Brian Riedl responds: “Although Congress is brazenly ignoring the Medicare Trustees’ warning, the coming entitlement spending tsunami is not going away. Every year of delay raises the eventual cost of reform by trillions of dollars. This is unconscionable. When the bill comes due, taxpayers will demand to know why Congress shirked their duty to confront this issue.”

Ideally, if Congress doesn’t like the President’s proposals [4] they should put forward their own. But at bare minimum they should at least debate the issue.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/07/24/the-heads-in-the-sand-coalition-strikes-again/

URLs in this post:

[1] Within the next five years, general revenue transfers are expected to constitute the largest single source of income to the Medicare program: http://www.heritage.org/Research/HealthCare/wm1869.cfm

[2] USA Today: http://www.usatoday.com/news/washington/2008-05-18-Redink_N.htm?loc=interstitialskip

[3] CongressDaily: http://www.nationaljournal.com/congressdaily/cda_20080724_3912.php

[4] President’s proposals: http://www.heritage.org/Research/HealthCare/wm1797.cfm

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