August
14, 2003, 2:30 p.m.
Send the Staff Home
An immediate
treatment for Medicare reform.
By David Gratzer
n
order to deal with the heat and humidity of Washington in August, presidents
from Adams to Bush have come up with a simple strategy: Leave town. For
House and Senate staff attempting to forge a compromise on Medicare legislation,
there is no such relief in sight. Indeed, the negotiators must surely
feel that they are trapped in some type of congressional summer school,
stuck inside while everyone else is having fun. But Republicans will do
more for Medicare by doing less — rather than eking out a difficult
compromise, they should just go home.
The political
rhetoric surrounding the Medicare bills passed this June is reminiscent
of an old Akira
Kurosawa film in which the same events are recalled very differently
by a handful of participants. For entitlement-friendly Democrats, the legislation
enhances benefits for seniors. Senator Kennedy (D., Mass.) went so far as
to declare: "If you oppose privatization, you support this.…"
For reform-minded Republicans, such as House Ways and Means Chairman Bill
Thomas (R., Calif.), it's a necessary step toward introducing choice and
competition.
But unlike the odd
distortions in a Kurosawa film, there's a simple explanation for the different
views: They're talking about different bills. And herein lies the difficulty
for House and Senate negotiators. The Senate bill effectively adds an
expensive benefit to Medicare, with almost no change to the program. The
House version outlines some reasonable changes, albeit modest in scope
and not in the immediate future. Conference negotiators are thus left
with the thorny task of attempting to bridge a gap as vast as, well, the
ideological gulf between Ted Kennedy and Bill Thomas.
Such a gulf could
be filled if President Bush would exert the sort of influence that President
Clinton did with Speaker Gingrich during conference negotiations. When
it comes to Medicare reform, however, President Bush has let it be known
that he just wants an agreement. Envisioning a bipartisan bill signing,
the White House has signaled it will be happy so long as the prescription-drug
issue goes away.
But while the White
House hopes Medicare will disappear as an issue, it's not going to —
regardless of what conference negotiators decide. "This is a system
out of control," explains Professor Thomas Saving of Texas A&M.
He would know — Prof. Saving serves as a public trustee of the Medicare
and Social Security Trust Funds. Under current law, Medicare will consume
20 percent of federal income-tax revenues by 2026, notes Prof. Saving.
But a drug benefit will make the program even more costly, consuming about
24 percent of federal income-tax revenues by 2026. "The Medicare
prescription-drug bill is terribly expensive when looked at from this
perspective." Medicare reform, then, ought not be about simply adding
on a new, expensive prescription-drug benefit.
There is a way to square good politics with good policy. In the midterm
elections, Republicans promised seniors a break on the cost of pharmaceuticals.
Late last week, the GOP delivered: Conference negotiators agreed on discount
cards that will reduce the drug bill of seniors, particularly those with
lower incomes. It's not a sweeping prescription-drug benefit — but
it's a relatively inexpensive add-on and, unlike a full benefit, will
give seniors a price break in time for the election.
With further negotiations,
the House and Senate designates could well hammer out a deal. Fiscal sanity,
however, demands more than a deal for the sake of a deal. The House and
Senate leadership should declare victory and send them home.
— Dr. David Gratzer, a physician, is a senior
fellow at the Manhattan
Institute.
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n
order to deal with the heat and humidity of Washington in August, presidents
from Adams to Bush have come up with a simple strategy: Leave town. For
House and Senate staff attempting to forge a compromise on Medicare legislation,
there is no such relief in sight. Indeed, the negotiators must surely
feel that they are trapped in some type of congressional summer school,
stuck inside while everyone else is having fun. But Republicans will do
more for Medicare by doing less — rather than eking out a difficult
compromise, they should just go home.
