In Medicare, Republicans clearly...

ON THE MOUNTING CRISIS

June 06, 1996

ON THE MOUNTING CRISIS in Medicare, Republicans clearly hold the high ground while Democrats continue to demagogue an issue that, unhappily, is giving them a political payoff hard to resist. Just two days before Medicare trustees warned that the Part A hospital insurance fund would go broke in five rather than six years from now, Senate minority leader Tom Daschle accused the GOP of wanting to "end Medicare as we have known it."

If only Senator Daschle were right! Actually, Republican reform plans are a less than adequate response to a fiscal and demographics problem that can hardly be exaggerated. A dozen years from now, when baby boomers begin to retire, the nation will be heading toward an economic train wreck if something is not done sooner rather than later. Yet Democrats have been content to cater to the fears of elderly citizens instead of doing what is required to put Medicare on a sustainable basis.

In time-tested fashion, politicians are now saying that action must and will be taken next year. That's not good enough. Each year of delay counts as two years of diminishing margin. In 1995, Congress had seven years until fund bankruptcy in 2002; in 1996, the span to the new drop-dead date of 2001 is only five years. In 1997, it will be only three years until 2000.

President Clinton, Speaker Newt Gingrich and the next Senate majority leader (probably Trent Lott) should set up a blue ribbon commission with orders to come back next March with a "Save Medicare" plan that Congress and the president have to accept or reject in its entirety. Such an approach has helped in dealing with Social Security and closing military bases.

The administration says it is willing to close the gap between its proposal for Medicare savings of $116 billion as compared to the GOP formula for $168 billion. If a compromise should materialize this year, if policy differences can be put aside to slow the growth of Medicare costs, this would be a small step forward.

The fiscal numbers provide an intellectually compelling case for more drastic action. But political calculation will be decisive. Perhaps Mr. Clinton may figure that an agreement -- any agreement -- will help him now that Bob Dole is leaving the Senate. Perhaps Republican incumbents on Capitol Hill will conclude that an agreement -- any agreement -- will help them cling to office even if it hurts their faltering nominee. Well, if that's what it takes to begin the rescue of Medicare, so be it.

Pub Date: 6/06/96

The politics of Medicare; Bankruptcy by 2001: Fund trustees reveal a faltering system requiring reform.

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