Two days into the new Congress, the majority has signaled they are unlikely to take their promise of fiscal discipline seriously. House democrats have turned off the Medicare trigger under the rules package for the 111th Congress, which means they are unlikely to even debate entitlement policy, let alone engage in necessary reforms.
The trigger requires that the President submit legislation that would contain Medicare spending if the program draws on general revenues for more than 45 percent of its funding for two years in a row. The benefits of the trigger are twofold. First, it helps prevent Medicare from crowding out other programs that rely on general revenue funding. Second, it forces Congress to debate the President’s proposal, shedding light on the ballooning costs of entitlements.
Majority Leader Steny Hoyer (D – MD) claimed that turning off the trigger was necessary because it was “an ideologically driven target based on a misleading measure of Medicare’s financial health.” This causes one to wonder exactly what “measure” Hoyer is using. The Congressional Budget Office, The Medicare Trustees, and The Government Accountability Office have all warned that entitlement spending—driven primarily by Medicare—is unsustainable in the long-term. Medicare alone will double in the next 30 years as a share of GDP, and excess costs in the program currently exceed $85 trillion. That’s the equivalent of more than 120 $700 billion bailouts—and even this figure underestimates the real fiscal woes in the Medicare program.
Ironically, economists on the left and right agree that triggers are a vital tool to force Congressional action to curb spending, tame entitlements, and get our long-term budget back on track. With today’s announcement that the deficit will reach $1.2 trillion this year, it’s a shame the 111th Congress doesn’t agree.