The Spectacle Blog

Broke Entitlements

By on 5.2.06 | 11:17AM

So now comes the new report that Medicare will go broke in 2018, two years earlier than projected just last year and 12 years earlier than had been projected in 2001. Social Security's day of reckoning, meanwhile, has been moved up from 2041 to 2040. All of this was announced yesterday by the trustees of the entitlement systems, who are required to issue annual reports on the programs' fiscal health.

Well, as Gomer Pyle used to say, "Surprise, Surprise, SURPRISE!!!" -- except that this bad news should come as no surprise to anyone. This twin looming disaster has been in the workds for years, and Congress keeps punting on the issues. To President Bush' credit, he had the guts to try to address the Social Security problem, but a combination of sheer gutlessness by his Republican (supposed) allies in Congress and of his administration's own hamhanded legislative tactics, policy choices, and communications, all combined to destroy the initiative that the president so bravely proposed.

Meanwhile, the Bush/Kennedy prescription drug plan, which is the single worst piece of federal legislation actually signed into law in my adult lifetime, makes matters worse, if only indirectly. It is true that the huge costs of that program are borne by the government's general fund, not by the (paper) trust fund of Medicare. But by adding so substantially to the government's general debt, the prescription drug idiocy makes the fiscal choices that much harder by providing even less leeway in the future for creative bail-outs/reforms of the trust fund by the general fund. The truth is that, in the end, all the money to pay for all these programs comes from the same source, the US taxpayer, and no matter how cleverly the gov't tries to disguise things by use of paper trust funds, the end result of it all is the same: One way or another, the more debt created by all government programs combined, the more debt is borned by taxpayers...which means, in the long run, higher taxes or higher interest rates or both.

Even worse, by removing the "carrot" of prescription drugs from the legislative arena, Bush/Kennedy makes it that much harder to reform the overall Medicare program -- because there no longer is the "goodie" of a new drug offering to make other reforms more politically palatable.

Back in 1995, when the GOP Congress first began talking seriously about addressing Medicare, the looming bankruptcy was still a quarter-century away. Now it is just 12 years away. Chalk up another failure of nerve, will, and seriousness to the ignoble, pathetic, embarrassing record of Congress since 1998.

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