The candymen

National | Washington expands an unsustainable program

Issue: "Court in the balance," April 1, 2000

Suppose your doctor tells you that if you do not change your eating habits, they'll threaten your health in a few years? What would you do? Would you ignore him, avoid vegetables like spinach, and eat more candy?

The fiscal equivalent of that scenario is currently playing out in Washington, D.C. At a time when every responsible voice is advising that spending on Medicare be cut back, President Clinton and congressional Republicans are putting together competing plans to add a prescription-drug benefit to the program.

This is typical Washington "reform": all candy, no spinach.

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But in this case the stakes are extremely high, because the stark reality is that Medicare, as currently structured, is unsustainable. In about 10 years, the enormous baby-boom generation will begin retiring and pushing the federal government's old-age entitlements to the limit. If left unreformed, retirement programs will account for more than half of federal spending by 2030, according to government projections, with Medicare alone eating up about a third of the budget. (This is probably a conservative figure; past estimates of Medicare's growth have fallen far short of the mark.)

In other words, on its current path the federal government will become largely a vehicle for directing money to senior citizens-who are wealthier, on average, than those in most other age groups who foot the bill for Medicare. Unless Medicare and Social Security simply collapse under their own weight, taxes will have to be raised dramatically or basic functions of government, such as national defense, will have to be weakened. And those budget surpluses we hear so much about today will become a distant memory.

The co-chairmen of the National Bipartisan Commission on the Future of Medicare-Sen. John Breaux (D-La.) and Rep. Bill Thomas (R-Calif.)-didn't flinch from this reality. Last year, they recommended adding the prescription-drug benefit to Medicare, but as part of a package that included some spinach, such as gradually raising the eligibility age for the program from 65 to 67.

But President Clinton, the candyman-in-chief, wanted none of the spinach. If he's learned anything over the last several years, it's that offering people "free" stuff from the government is a good way to become popular. He's found that Medicare, in particular, is a useful stick for beating up Republicans. So not only has he proposed adding the prescription-drug benefit, he also wants to allow people as young as 55 to buy into Medicare.

Why aren't Republicans fighting him more on this? Keep in mind that the GOP's last experience with Medicare was a bit like finding a deadly spider in your shoe. The year was 1995 and Republicans were still riding the crest of the 1994 "tsunami" that gave them majorities in both houses of Congress for the first time in 40 years. As part of their first budget, GOP leaders proposed restraining the growth of Medicare. Under their proposal, the program would have continued to grow-just not as fast as had been projected.

Mr. Clinton labeled this a "cut," attacked congressional Republicans for insensitivity toward the elderly, and shut down the government rather than accept the GOP's exceedingly modest proposal. A pliant press corps repeated his claims without any skepticism.

The GOP's popularity sank fast, and the momentum of 1994 was lost for good. Shell-shocked Republicans in Congress probably still wake up in the middle of the night screaming, "It's not a cut!" In this election year, most of them have no stomach for offering the electorate anything that Democrats might be able to portray as spinach. Instead, they've become candymen as well, rejecting the Medicare commission's spinach (raising the eligibility age) but accepting its candy (adding the prescription-drug benefit).

So at a time of great prosperity, when Medicare could be reformed relatively painlessly and in advance of an easily predictable crisis, both parties are proposing that the program be expanded.

Few Americans seem to be worried, though; we're too busy enjoying the candy and giving Mr. Clinton sky-high approval ratings. But in 10-15 years, when a bloated Medicare begins threatening the economy, we'll realize that those brave few who advised eating spinach actually had our best interests in mind. The candymen just wanted to be liked.

Timothy Lamer
Timothy Lamer

Tim is editor of WORLD Magazine.


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