- The Washington Times - Friday, September 7, 2001

Congress has returned from its August recess, and, just like clockwork, the budget follies have moved into high gear. The train wreck that's being forecasted before the fiscal year that begins on Oct. 1 may well be even more spectacular than past crashes with much more dire consequences.
The congressional Democratic leadership continues to charge that President Bush has raided the Medicare Hospital Insurance Trust Fund. At the same time, these Democrats Senate Majority Leader Tom Daschle, House Minority Leader Richard A. Gephardt and Senate Budget Committee Chairman Kent Conrad project horrific economic consequences if a relative pittance of the Social Security surplus is used to finance pressing defense needs next year. Meanwhile, the bear market growls and the economy steadily tanks, threatening to tip the nation into a full-blown recession.
Recently, Larry Lindsey, chief economic adviser to President Bush, clearly illustrated the Democrats' deception regarding Medicare. Medicare payroll taxes, which are used mostly to pay for hospital expenses (Medicare Part A), total $175 billion this year. Premiums paid by the elderly for out-of-hospital expenses, such as doctors' fees and lab work (Medicare Part B), total $22 billion this year. Therefore, total Medicare receipts will be $197 billion. But the federal government will spend $242 billion on total Medicare expenses this year. Thus, not only is there no Medicare "surplus," but there will be a $45 billion Medicare deficit this year.
Medicare demagoguery is small beer compared to the crazy, contractionary fiscal policy these Hoover Democrats want to pursue as the economy continues its slowdown. Compared to the 5.2 percent growth rate the economy experienced during the four quarters that ended in June of last year, the economy has grown a paltry 1.2 percent during the past year. Worse, the annual growth rate during this year's second quarter fell to 0.2 percent, placing the nation on the verge of a recession. As the slowdown has intensified, the federal government's revenues have naturally failed to meet expectations. Meanwhile, a well-timed, anti-recessionary $38 billion tax cut this summer further depleted revenues. Hilariously, Mr. Daschle, who actually proposed a $60 billion tax cut for this year, has been blaming the revenue shortfall on Mr. Bush's tax cut.
The Democrats' histrionics would almost be entertaining were it not for the fact that many of them Messrs. Daschle, Gephardt and Conrad among them intend to use their theatrics to thwart the desperately needed refurbishment of the nation's military forces. It was in the face of such deplorable tactics that the comments on Wednesday from Sen. Daniel K. Inouye, a liberal Democrat from Hawaii, were so welcome. "I, for one, believe it is essential that we provide the resources necessary for defense," Mr. Inouye responsibly argued, adding, "It would be easy to play politics on this issue, but this is too important. And so I will not take part in any effort which could shortchange national defense for political gain." Hear, hear.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide