Jump Starting A Debate On A Very Real Crisis
Conn Carroll /
Responding to legislation from the White House that attempts to corral rising spending in Medicare, Sen. Ted Kennedy (D-MA) told The Washington Post: “The administration has trumped up a phony crisis in Medicare to justify proposing deep cuts in quality health care for seniors while giving massive subsidies to HMOs and other insurance companies.” As a joint paper between The New America Foundation and The Heritage Foundation shows, Kennedy could not be more out of touch with reality. The report begins:
<blockquote>The single greatest threat to the fiscal health of the United States is the runaway growth of the nation’s major retirement and health care entitlement programs. Social Security and Medicare are projected to grow from 7.5 percent of GDP today to almost 13 percent of GDP by 2030. Already, the two programs consume over a third of the federal budget. The total present value costs of Social Security and Medicare over the next 75 years exceeds $41 trillion, or, as the Government Accountability Office points out, a debt burden of $135,000 for every man, woman, and child in America. If nothing is done to check the growth of spending on social insurance, federal spending as a share of the economy will increase by half, from about 20 percent to almost 30 percent, over the next 30 years.</blockquote>
This is what Kennedy calls a ‘phony crisis’. Now the White House plan submitted to Congress Friday is far from perfect, but it does begin a very necessary debate our country must have. The most important feature of the President’s plan is the application of means-testing rules in Part B, the part of the program that pays doctors, to the Medicare Part D drug program. This would be a substantive step toward reducing the unsustainable costs of this program by reducing taxpayer subsidies to wealthy beneficiaries.
Ultimately, our nation’s entitlement crisis will not be solved until America learns that they do not have a moral right or legal claim to benefits. Congress must put the ‘insurance’ back into social insurance by scaling back benefits to those who don’t need them. The Administration’s proposal, while imperfect, sets us down that road.