Health Care | Entitlements

Just over a year ago, Republicans won the midterm election in a landslide. They picked up a historic number of seats in the House of Representatives, substantially narrowed the Democratic majority in the Senate, and took control of scores of state legislatures and governors’ mansions. The message from voters was clear: they wanted to put an end to the hyper-activist agenda coming from the Obama administration, and to renew policymakers’ focus on promoting private sector economic growth, not more government jobs.

In coming years, the United States must take steps to address the serious challenges of a large and growing fiscal gap as well as rapidly rising costs for both public and private purchasers of medical services. At the center of these twin challenges is the Medicare program. It is the largest federal health entitlement program, and Medicare spending is already putting tremendous pressure on federal finances due to many years of rapid cost growth. In the coming two decades, federal spending on Medicare is set to soar even more rapidly. Medicare is also the single largest insurance plan in the United States, and thus central to solving the problem of rapidly rising costs in the nation’s broader health system.

On Sunday, October 29, the Washington Post published a front-page article by Lori Montgomery about Social Security. The piece explained that the current excess of Social Security expenditures over incoming tax revenues was straining the federal budget and that the recent recession had caused this situation to arise earlier than previously anticipated. The article itself was unexceptional but the reaction to it was not. A number of commentators on the left criticized the Post’s portrayal of Social Security finances. The following Sunday, the Post’s Ombudsman posted a follow-up piece that defended the article in some respects. Unfortunately, while attempting to accommodate the viewpoints expressed by critics, the Ombudsman committed some factual errors that undercut the original article’s informational value.

Last week, the president unveiled yet another budgetary proposal (his third of the year!). Officially at least, this latest offering is supposed to be aimed at influencing the Joint Select Committee on Deficit Reduction. The twelve-member Joint Committee was created in the August legislation lifting the debt ceiling and is charged with drawing up a plan to cut at least $1.2 trillion from the expected ten-year budget deficit.