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War Over Future Of Medicare Waged With Ideological Missiles

MONDAY, JUNE 3, 1996

The political war over the future of Medicare, a cannonade of oratory and statistical rotten tomatoes that has already thoroughly spattered both parties, is about to resume. And with near-religious fervor, for this time, control of both Congress and the presidency could turn on the outcome.

On Wednesday, the trustees of the $200 billion-a-year Medicare system are expected to confirm warnings by the Congressional Budget Office that the program is going broke faster than ever.

Republican leaders in Congress say they plan to blame President Clinton, who vetoed legislation last year that would have restrained Medicare spending.

The White House will accuse the Republicans once more of trying to decimate health care for retirees to raise money for tax cuts for the rich, leading Democrats say.

Lost in the fight are the two serious proposals that Republicans and Democrats have actually offered this spring to halt Medicare’s fiscal slide. Outside experts say the plans offer a basis for a compromise that would stabilize the program.

Virtually nobody expects such a compromise to occur. One reason is unalloyed politics. Officials on both sides believe that their positions are politically advantageous, and that a compromise would cost them their edge.

The Democrats’ strategy is aimed at tightening their hold on the majority of the 33 million potential voters who are 65 or older, and their plan is more generous to the aged.

Republicans have cast their appeals in terms of the young, and their plan restrains more spending now in the name of saving for future generations.

But the two plans, while close enough in accounting terms, use opposing methods to reach their mutual goal.

The Republican proposal would stabilize Medicare by imposing strict limits on its spending, sometimes in ways that the White House and even some Republicans say could be onerous.

Clinton would stabilize the program by effectively moving $55 billion in medical expenses out of the Medicare trust funds, and covering them instead with money from the Treasury’s general fund.

His mechanism is a tactic that Republicans in the House proposed last year: shifting a substantial portion of the cost of providing home health care out of Medicare’s hospital trust fund.

The cost would ostensibly be picked up by Medicare’s other trust fund, which covers doctors and other patient care outside hospitals. But in fact the government would use general revenue to pay for it.

The Clinton move is shrewd politically, in that it would prolong Medicare’s solvency with fewer unpopular restraints on spending and without a tax increase.

Whether it is perfectly sound fiscal policy - or flagrant fiscal flimflam, as critics charge - is almost entirely a matter of budgeting ideology.

“More gimmickry,” said Sen. Spencer Abraham, R-Mich. Some private experts are skeptical, but less blunt. “You may call this a solution,” said Robert Reischauer, the Brookings Institution scholar who ran the Congressional Budget Office when Democrats controlled Capitol Hill. “I’d call it a rearrangement of the books.”

Others, like Stuart Altman, a longtime student of federal health policy at Brandeis University, are more positive. “The crisis is the Medicare trust fund going bankrupt, and the problem is the long-term deficit,” he said in an interview. “I can handle the crisis by making the problem a little worse, and that’s what the president did. You can call that gimmickry. I wouldn’t.”

In the budget debate earlier this year, the two sides attacked each other’s proposals in the bluntest of terms.

Sen. Paul Wellstone, D-Minn., indicted the Republicans for “recklessness,” while Sen. Robert F. Bennett, R-Utah, shot back that his party was the only one with the “courage to recognize that Medicare, to be handled as business as usual, is headed for disaster.”

Reischauer said he agrees that the program needs an overhaul. But he still wonders whether the administration’s plan would achieve it.

“That is less likely to occur,” he said, “unless there is some pressure on the Congress to address it.”

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