- The Washington Times - Sunday, June 29, 2003

When our elected officials race to grab a short-term political advantage, they often make a long-term mistake. That’s because it’s generally easier to go for a soundbite solution rather than fight for real change, even when everyone knows reforms are needed.

Consider Medicare. The Congressional Budget Office estimates spending on the popular entitlement will more than double over the next three decades, jumping from 2.3 percent to 5.4 percent of the nation’s gross domestic product. That makes sense; as the Baby Boomers retire, the number of people on Medicare is also expected to double over the next 30 years.

Medicare trustees have repeatedly warned Congress that the program’s financial difficulties are severe. In 2002, the trustees urged “effective and decisive action” to reinforce the very limited reform measures enacted by Congress.

So what are lawmakers doing to solve this looming financial crisis? Instead of drawing up an effective plan for reform, they’re trying to slap a massive prescription drug benefit on to the struggling program. They claim that benefit will cost “only” $400 billion over the next decade. That is certainly a low guess. After all, the last time Congress tried to reform Medicare, the CBO’s estimated cost of the drug benefit doubled in just one year, from $5.7 billion when the bill passed in 1988 to $11.8 billion.

The Senate is nonetheless moving quickly with its bill, and President Bush has indicated he will sign whatever lawmakers put in front of him.

From a purely political point of view, that makes sense. It allows lawmakers and the president to face voters in 2004 and declare they’ve provided prescription drugs to seniors. Since the bill doesn’t take effect until 2006, no one will know how bad it’s going to be until well after the next two election cycles. In other words, it makes a short-term problem go away.

But let’s consider the long-term effects.

The Senate bill sets a minimum drug benefit. Any private plan that doesn’t offer at least that large of a benefit would disappear. That would force many seniors, who are now happy with their employer-provided coverage, to enter the government plan. It would also encourage many companies, which are now providing prescription drug plans to their retired employees, to drop those plans. After all, if the government is going to pick up the tab, why should private businesses?

And the government is going to pick up the tab. The Senate bill would provide an equal benefit to all seniors, regardless of income or need. That means that retired multimillionaires would get the same benefit as widows and retired social workers. That’s an extravagance we simply cannot afford. Real reform will help the truly needy, without creating an open-ended entitlement.

Today, about three-quarters of seniors have some form of prescription drug coverage, either through a former employer or with a supplemental policy they’ve purchased. Any reform measure must give those seniors the option of keeping their current coverage.

President Bush’s initial outline provided for such real reform, along the lines of the Federal Employees Health Benefits Program, the same program that covers lawmakers and their staff. FEHBP includes a number of private plans, and they all offer drug benefits. The wide variety of plans means seniors could choose an expensive plan with a gold-plated drug benefit, or a more basic (and less costly) plan with a smaller benefit.

But the president never drafted a complete proposal, and he has failed to fight for his original outline. If he had taken as active an interest in Medicare reform as he did in his recent tax cut, real reform could have sailed through Congress.

Instead, he has indicated he will sign whatever plan Congress crafts. He has made that mistake before. That’s what led him to sign the farm bill (which brought back wasteful subsidies for wealthy farmers and will end up costing taxpayers hundreds of billions of dollars) and a campaign finance reform bill that President Bush himself admitted contained unconstitutional elements.

This lack of leadership has Congress on track to pass a fatally flawed Medicare reform bill that does nothing more than create a massive new entitlement within an already financially struggling program. If he has the courage of his conservative convictions, Mr. Bush should veto it and insist Congress start over.

Lawmakers should provide a prescription drug benefit, but only as one part of real Medicare reform. Our elected officials owe that to all of us, and to our children and grandchildren. After all, they’re the ones who will end up paying the bills tomorrow if we make the wrong choices today.

Ed Feulner is the president of the Heritage Foundation.

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