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Jan
12

What’s up for Medicare?

The newly elected government has big plans for Medicare, Medicaid, and other entitlement programs. Well, perhaps we should say not-as-big plans.
In California HealthLine (an excellent daily news source) yesterday, the following appears:
“White House officials and congressional budget leaders last week indicated that President Bush in his budget request to Congress “will try to impose firm, enforceable limits on the growth of federal benefit programs” while continuing to “give priority to military operations and domestic security over social welfare programs,” the New York Times reports.”
To those readers who have been with us since the beginning (I know, only two plus months ago…), this will come as no surprise. Quite simply, we cannot afford tax cuts, guns, and health care; and the two that appear to be winning are tax cuts and guns.
Where does that leave Medicare?
“Bush has said that his new Medicare law will hold down costs, but a 2004 actuaries report — signed by three Cabinet secretaries, including Thompson — concluded that the program’s long-term liabilities had increased by more than one-third, or $17 trillion, in a single year.” The article went on to note that Bush claimed the $500 billion Medicare Drug bill will save money by “paying for medicine that would prevent the need for expensive heart surgery”.
Sounds like pharma’s DTP (direct to presidents) campaign is working…
But seriously, it is puzzling that the federal executive and legislative branches are focused on Social Security reform when Medicare is significantly more impaired.


6 thoughts on “What’s up for Medicare?”

  1. “Quite simply, we cannot afford tax cuts, guns, and health care; and the two that appear to be winning are tax cuts and guns.”
    It’s become a bit of a bore to point out that a reduction in tax rates is not the same thing as a reduction in tax revenues, as the Reagan years proved. Yeah, it’s a bore – – but someone’s gotta do it.
    And here is another interesting factoid – reported by none other than Pravda er, Reuters:
    “WASHINGTON, Jan 7 (Reuters) – The U.S. government ran a $1 billion budget surplus in December, helped by a rise in corporate tax payments, the Congressional Budget Office said in its latest budget report released on Friday. The surplus, which compared with an $18 billion deficit in the previous December, helped create a smaller fiscal deficit for the first three months of the 2005 fiscal year, than in the same quarter of the prior year.”

  2. There is universal recognition that the tax cuts have led to greatly increased deficits. This has been acknowledged by the CBO explicitly. The point is, the present administration has been clear that present health care programs, specificaly Medicare and Medicaid, are not sustainable in their present configurations, and thus we certainly cannot afford to add to the problem by paying for “national health care”. Why? the adminstration’s spending priorities place health care below Iraq et al.
    Let’s be clear about motivations and priorities, and not focus on political dogma.

  3. “There is universal recognition that the tax cuts have led to greatly increased deficits.”
    “Let’s be clear about motivations and priorities, and not focus on political dogma.”
    “Universal recognition” huh? That’s a pretty dogmatic statement, especially considering there is so much controversy about this very point, the CBO and their static analyses notwithstanding.
    Can one really “be clear about motivations and priorities” in regard to federal entitlement programs without considering the political? I think not.
    The fact remains that the tax revenues of the US government almost doubled in the years following the “tax cuts” of the early 1980’s. So how did those “tax cuts” result in deficits? How are current “tax cuts” yielding higher federal tax receipts – for example, in December 2004?
    IMO, a theory that “greatly increased deficits” result from “tax cuts” should be able to explain these obvious facts about revenues that inconveniently do not appear to fit the theory. So what is the explanation? How are the advocates of the theory behaving when, instead of offering explanations, they attempt to sweep ornery facts off the table? Clear thinkers? Dogmatists? You tell me.

  4. Mr. Fembup has missed my point – there are plenty of places for political discourse, please limit general discussions of same to those places. My point is, and remains, that the present administration has indeed chosen national sscurity (their words, not mine) over domestic priorities. I have asked Mr. Fembup to focus his comments on the post itself.

  5. “I have asked Mr. Fembup to focus his comments on the post itself.”
    Was not the statement “Quite simply, we cannot afford tax cuts, guns, and health care; and the two that appear to be winning are tax cuts and guns” – – on the post itself?
    My observation went to the point that your statement presents “tax cuts” as costs, just like guns or health care. However, in real life, “tax cuts” often do not mean reduced revenue at all, as history has shown. “Tax cuts” are often alleged when a tax increase actually takes place, but has been lessened a little bit. Too frequently the term “tax cuts” is used as political code to create the impression that revenues will actually reduce, that the “tax cut” always represent a COST. And that has often been false, as history has shown
    Would you not agree that a discussion of resource allocation among “tax cuts, guns and health care” would benefit from clarity on this?
    I think that’s only common sense, and not at all dogma. I’m surprised that you disagree, and that you disagree by suggesting my comments are somehow dogmatic, out of place, and that I should go away. I expected better.

  6. I did not ask you to go away, merely to focus your comments on the blog’s subject matter. Again, read the original post – it refers to the Bush Administration’s own priorities, and does not argue whether tax cuts generate revenue or not. The post states:
    “White House officials and congressional budget leaders last week indicated that President Bush in his budget request to Congress “will try to impose firm, enforceable limits on the growth of federal benefit programs” while continuing to “give priority to military operations and domestic security over social welfare programs,” the New York Times reports.”
    Clearly, the administration has chosen as priorities tax cuts and defense over health care; this is amply demonstrated by their own words as well as the budgetary allocations.
    Mr. Fembup is attaching value judgements to this discussion; I am seeking to clarify and document and use information to discern trends.
    Please keep comments to the subject matter.

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Joe Paduda is the principal of Health Strategy Associates

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