The voices of Tax Policy Center's researchers and staff
Democrats are proposing to control future Medicare costs, and Republicans are trying to stop them. Who knew?
This could have been the perfect “Nixon in China” moment. Democrats—who created Medicare and for decades resisted GOP moves to curb the program—control Congress and the White House. A Democratic President has embraced modest efforts to slow the program’s unsustainable rate of growth. Drug makers, doctors, and hospitals all swallow hard and buy into the idea. It could be the perfect moment for a bit of desperately needed fiscal responsibility.
And what happens? Republicans, who only months ago tried to turn Medicare from an entitlement into a voucher, are lined up against slowing the program’s growth. They offer amendments in the Senate Finance Committee to “protect our seniors.” GOP Party Chairman Michael Steele writes a manifesto acknowledging that the long-term growth rate of Medicare is a problem, but insisting that Republicans will go to the barricades to save the elderly from the ravages of Obama-care.
As this depressingly familiar graph shows, the current pace of Medicare spending is not only unsustainable in the long-run, it is politically impossible.
By mid-century, Washington will be spending nearly 10 percent of Gross Domestic Product on Medicare but, without major policy changes, collecting only about 20 percent of GDP in revenues. That leaves only 10 percent of GDP for Social Security, Medicaid, interest on the debt, national defense, and everything else government does. And lawmakers will face two equally unpalatable choices: Slash all that other spending by more than half, or raise taxes to dangerously high levels.
What looks increasingly like a missed opportunity to address this looming disaster is no surprise, given the toxic political climate here in Washington. And not too many years ago, Democrats did the same thing to George Bush, who tried to get a handle on Social Security. Dems were happily wringing their hands over massive Bush-era deficits but, given an opportunity to do something about it, chose the partisan low road.
Now, the Republicans are taking their turn at irresponsibility. Having lost control of the purse strings, they are howling about the debt we will leave our grandchildren. Yet, given the chance to make the smallest dent in Medicare’s growth rate, they suddenly have become the protectors of seniors. I half expect them to propose naming the Capitol after Claude Pepper.
Imagine for just a moment an alternate universe: Democrats and Republicans set aside their squabbling and agree to eliminate wasteful or even dangerous Medicare spending. This, however, would require lawmakers to act like adults and explain that more health care is not the same as better care, and that Medicare growth could be slowed without jeopardizing the health of seniors.
But that isn’t likely to happen. Democrats and Republicans can agree to hand out Medicare dollars they don’t have, as they did with the Part D drug benefit. But when it comes to controlling costs, partisan name calling is so much more fun
Posts and Comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.