Medicare Ills Deeper Than Budget

In war, the old saying goes, the first casualty is truth. In Washington these days, the battle of the budget is in full swing, and truth is getting harder and harder to find.

That’s especially true when the subject is Medicare. Listen to the White House, and you’ll hear Congress is about to execute a reverse-Robin Hood: Taking money from the Medicare account to provide a tax cut for the rich. Nice rhetoric, but not much connection with reality.

What are the facts? Yes, Congress wants to reform Medicare, and bring its costs under control. And yes, Congress wants to reduce taxes, to strengthen families and spark an economic upsurge that will come when counterproductive taxes are eased or eliminated. Both are worth doing - but neither has anything to do with the other.

The fact is simply this: What ails Medicare has nothing to do with the budget. If the federal government had a balanced budget right now, and we let Medicare run the way it runs right now, Medicare would go broke by the year 2002. Whether Congress cut taxes it wouldn’t help or hurt Medicare. Medicare is headed for bankruptcy for one reason and one reason alone: Because its costs are out of control. That’s what happens eventually, when a program runs 10-plus percent cost increases year after year - the way Medicare has.

Even if that’s true, what if we don’t reduce Medicare spending? What would it take in higher taxes to make up the Medicare shortfall? Try a payroll tax hike of more than 100 percent over the next seven years: Money out of every taxpayer’s pocket to “feed” a program bent on outgrowing the rest of the budget. And what would you get for all those taxes? A bigger, more bloated Medicare - ready to go bankrupt.

A tax hike is no option at all. There’s only one option, and Congress had the courage to take it: Reform Medicare and get its costs under control.

That’s where the White House saw a political opening, a chance to score points with fear over fact. It’s hard to say what President Clinton is up to. Is he saying nothing’s wrong with Medicare - let whoever is in the Oval Office in 2002 deal with it? Is he saying he’s ready to double payroll taxes to pay for the program with its present spending appetite? Is he defending Medicare as we know it?

Or maybe President Clinton is just looking for a way to scare the Congress off the tax cuts the American people want.

Whatever the reason, the facts are against the president. The only thing he’s got going for him is fear.

So here are a few facts to bring along when you tune in to the Medicare and tax cut debate:

First, the facts about the cut. Congress wants to cut $270 billion from Medicare between now and 2002. Seven years from now, under the Congress’ plan, more money will go to Medicare than it receives today. But it will be less money - $270 billion less - than Medicare would have consumed if we simply let the program spend itself into bankruptcy.

In other words, the Medicare cut is really no cut at all: It’s merely saving money by slowing the rate of increased spending. Even under the Republican plan, Medicare increases each year will still more than double the rate of inflation.

Second, the facts about the number. What’s the magic in $270 billion? Couldn’t Congress settle for less or split the difference with the president? No, not if the idea is to save Medicare and make it solvent for the generations of Americans who are paying for it now - and who expect it to be there when they reach retirement age.

If that’s your aim - and it’s the only way we can truly fix the system - $270 billion in slower growth is what it takes: That’s the number that brings Medicare into actuarial balance through the year 2015, when the first wave of the Baby Boomers begin to reach 65.

Third, the facts about the tax cuts. American families - and the American economy - need these cuts in order to grow the new jobs that will extend and expand opportunity in this country. Reducing the drain of money from the private sector to the federal government will push interest rates down and make investments in education, housing and business expansion more affordable.

That’s the truth about Medicare and the tax cuts, and only the White House finds it frightening.

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