Triggering a Medicare Debate
Byline: Matt Moore, SPECIAL TO THE WASHINGTON TIMES
Last week, the U.S. Treasury department published the annual reports for Social Security and Medicare. The new volumes - all 460 pages, five pounds worth - met a so-what, ho-hum reception by both the national media and congressional leaders.
Not much changed since last year; what's the big deal, right?
Social Security and Medicare are hurtling toward a cliff like lemmings... ho hum. $70 trillion in unfunded promises... yadda yadda, whatever. disaster, death, destruction. We've heard it all before.
But this time, just maybe, it will turn out different. This time the president and Congress have to do something about it.
An obscure provision in the 2003 law that added prescription drugs to Medicare - with, incidentally, a $17 trillion price tag - requires the Medicare trustees to raise a flag if two consecutive reports predict Medicare will draw more than 45 percent of its funding from general revenues within the next seven years. The measure is generally referred to as a "general revenue trigger."
In short, if Medicare is expected to drain too much income tax money from the federal government within the next seven years, the trustees have to alert Congress. The 2006 report was the first to cross the threshold, and this year's report required the trustees to officially sound the alarm.
Now what? Under the 2003 rule, President Bush must propose a plan to deal with the imbalance as part of his next budget, for 2009. Congress is required to "fast track" consideration of the president's plan.
Both the president and congressional leaders should take the warning to heart: Medicare is growing really fast. Thanks to the retirement of the 77 million Baby Boomers - and the soaring costs of medical care - Medicare will start sucking big bucks away from other treasured federal programs.
Within the next two decades, Medicare will drain almost a quarter of federal income tax revenue. By 2030, about the midpoint of the baby boomer retirement years, Medicare will take more than a third. That means the government will have to raise income taxes by a third or stop doing about a third of what it does today. Maybe we won't miss NASA or federal education funding or subsidies for farmers. …