Weekly Newsletter: March 10, 2008
Democrat Budget Fails to Address Medicare’s Woes…
The concurrent budget resolution (H. Con. Res. 312), which Democrats will bring to the House floor this week, does not include provisions providing comprehensive Medicare reform. The budget includes reconciliation provisions instructing the Ways and Means Committee to reduce spending on mandatory programs within their jurisdiction—but by only $750 million over the next five years. An amendment offered during last week’s Budget Committee markup by RSC Chairman Hensarling, which offered reconciliation instructions to ensure that Congress addresses the funding warning issued by the Medicare trustees last year, was defeated on a party-line vote.
Many conservatives will be concerned that, with the Medicare trust funds projected to be exhausted in little more than a decade, the Democrats’ budget will make no substantive effort to address Medicare’s $74 trillion in unfunded liabilities. In addition, some conservatives may be concerned by press reports indicating that the Democrat leadership will use the reconciliation process to justify new spending proposals for health care, rather than using all savings achieved to reduce the deficit and improve Medicare’s long-term viability.
More information on the Medicare trigger—and the President’s proposals for entitlement reform—can be found here.
…And Increases Spending on SCHIP
The Democrat budget also includes a proposed $50 billion reserve fund to finance an expansion of the State Children’s Health Insurance Program (SCHIP). This reserve fund would be consistent with a bill (H.R. 3162) considered by the House last July, under which nearly two and a half million children would drop private health insurance coverage in order to join a government-financed program—including children in families with incomes of more than $80,000.
Most conservatives support the enrollment and funding of the SCHIP program for the populations for whom it was created. However, continued efforts to extend this government-financed program to wealthier children and families may give some conservatives concern. If Democrats wish to look out for America’s children, some conservatives might argue that the better way to help is to reform Medicare and Medicaid so that future generations will not be saddled with trillions of dollars of debt, not to work to expand public programs for wealthier families.
An RSC Policy Brief discussing Administration proposals on SCHIP can be found here.
Mental Health Parity Bill Passes House
A Top Ten list of conservative concerns about H.R. 1424 can be found here.
Votes on the motion to recommit and final passage can be found here: Motion to Recommit Final Passage
Article of Note: Silence on Medicare Reform
Last week, the New York Times highlighted the absence of plans by Sen. Hillary Clinton or Sen. Barack Obama to confront the fiscal entitlement crisis our country faces in the coming decade. Although a report issued last month by the Centers for Medicare and Medicaid Services estimated that federal spending on health care will increase by 7.3% annually for the next decade, neither Democrat candidate has provided details on how to address the trillions of dollars of debt this additional spending will create.
The Times article notes that much of Medicare’s fiscal problem stems from the overall growth in health care costs. Several reports released in recent weeks have highlighted the need for measures to examine, and ultimately slow, excess cost growth within the health sphere. The RSC is preparing a policy brief summarizing these reports and offering some principles for controlling health costs using conservative, free-market solutions. By contrast, proposals by Sens. Clinton and Obama to control health costs contain a heavy emphasis on government-imposed price controls on insurance and pharmaceutical companies.
With the first Baby Boomer scheduled to become eligible for Medicare in fewer than three years, and the winner in November’s election likely to seek re-election, any potential President will have to address this crucial entitlement reform at some point during his (or her) intended term of office. Moreover, the $2 trillion added to America’s collective entitlement obligations every year that Congress and the President fail to take action provides a strong justification for immediate reform. Hopefully the Democratic contenders will embrace the opportunity to propose real, market-oriented solutions that control health care costs, or otherwise, as Robert Reischauer of the Urban Institute notes, “it will be difficult for Senator Clinton and Senator Obama to retain popular support for their plans once the details are supplied.”
Read the article here: New York Times: “About Those Health Care Plans by the Democrats…”