No Spending Really Should Be 'Uncontrollable'

April 05, 1992|By CAROL COX WAIT

WASHINGTON — Washington. -- Congress and the president could agree to pass a law creating an entitlement for redheads: Every redhead in the United States would be entitled to a payment of $1,000 a year from the government, and the amount of that payment would be indexed to the consumer-price index so it would go up each year to compensate for inflation.

Laws and regulations would have to spell out whether the benefits should be paid only to natural redheads or whether one could qualify by dying one's hair; whether payments should be limited to U.S. citizens who are redheads or whether any redhead who happened to reside in the United States could qualify; how long you had to be a resident; whether or not you had to be a legal resident, etc. Of course, there would have to be standards and regulations to determine who are redheads: Would strawberry blonds be eligible? Just how much auburn makes a brunette a redhead?

Undoubtedly, the new program would be challenged on fairness grounds. Some would argue that rich folks should not qualify for government grants just because they happen to have red hair. Others would say we have to include the rich, else well-to-do redheads would not support the program. Still others would argue that it is unfair to exclude blonds, brunettes and those with black hair.

If the pattern of past entitlements held true, in the first few years after creating the redheads' entitlement program Congress and the president would expand benefits to include more people and perhaps enrich the benefits.

Soon the program would become so costly there would be pressure to cut back.

But program costs would be "uncontrollable," that is, they would be entitlements. We label entitlements uncontrollable because they are not subject to review and adjustment through the regular annual appropriations process. Congress and the president would have to change the basic entitlement law in order to cut back on benefits; and they are reluctant to rewrite laws to take benefits away from very large groups of people.

If this sounds silly, substitute the word "elderly" for the word "redhead" in paragraphs above. Social Security and Medicare are entitlements to the elderly. Over the years, they have been expanded.

Social Security started out as a retirement supplement, a safety net. It is not supposed to be the sole support of large numbers of retired people.

Initially, Medicare established boards to determine when and for whom the program would pay for renal dialysis. That did not last long. Our government does not ration health care services, period. As a result, nearly 30 percent of Medicare dollars are spent on people in the last year of their lives -- nearly 40 percent of that amount on people in the last 30 days of life. Surely there is some room to consider quality of life, restrict some services to some people in some circumstances, at least to consider cost and set priorities in government funded health-care programs.

FICA taxes, dedicated taxes to pay for social security and Medicare, take 15 percent of every dollar each of us earns. Those taxes take a little bigger bite of the whole economy with every passing year; they have crept up by 4 percentage points of Gross National Product since 1960.

Even when we write entitlements to serve the poor, we tend to write them in ways which ensure that powerful constituencies will work hard to expand the programs and to fight any benefit reduction.

Look at Medicaid. We could save money and provide high-quality health care for the welfare-dependent population if we permitted states to contract with HMOs and other managed-care providers and require welfare recipients to use the doctor(s) and hospital(s) with whom the states sign contracts. But doctors oppose that approach. It would infringe on "freedom of choice" which is at the heart of our fee-for-service health-care system.

I submit that proponents of this position are less concerned with protecting the welfare population (the putative beneficiaries of the program) than they are with protecting the doctors and hospitals -- powerful influences in all our communities.

We must stop using the term "uncontrollable" as it applies to federal spending. We cannot control the cost of interest directly, but we can reduce interest by reducing the deficit. Everything else in the budget we can control directly.

Isn't it high time we ask and answer some difficult questions? Will support for Social Security decline unless every person over 65 gets a check? Should retirees with multimillion dollar fortunes continue to get benefits (indexed so they go up every year to compensate for inflation)? Isn't there some income level above which folks should not get Social Security?

Should we use general revenues (mostly income taxes) to pay 75 percent of the cost of Part B Medicare coverage for everyone? Should wealthy retired people pay a larger share of their own Medicare costs?

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