In 1993, when Republican House
Budget Committee staffers were searching for options to include in the GOP
budget alternative “Cutting Spending First”, we opened a book called “CBO Spending
and Revenue Options” to find proposals to reduce the rates of growth in federal
spending over the next 5 years.
We found $177 billion in savings from
projected baselines in Medicare and Medicaid alone. Over 5 years, not 10 years
as is custom today. Those proposals just slowed down the rate of growth in both
programs ever so slightly. They were not absolute cuts from the year before in
any of the 5 years.
They led to balanced budgets from
1998-2001. That is all we need; a slowdown in growth in federal spending, not
absolute cuts.
In Medicaid and Medicare in
particular.
If Congress passed every proposal
put out by CBO back then, we would be swimming in budget surpluses, not
deficits. There were trillions of cumulative savings laid out back when the
federal budget was only $1.4 trillion to begin with.
The most recent 2019 edition brings
tears to the eyes of anyone who was serious about budget discipline 25 years
ago. A cursory reading of the options to hold down the rate of growth in
entitlement spending shows that most of the options in 2019 are the same as they
were in 1993 simply because so few of them have been passed and implemented.
For example, there was a proposal
back then to raise the eligibility age for Medicare from 65 to 67 to match the
stairstep increase in retirement age eligibility of Social Security by 2024. We
are living far longer than life expectancies were in 1935 when Social Security
was passed; shouldn’t the retirement age in Medicare be raised to reflect that
basic fact of life especially since Social Security has already done so?
Had it been passed into law 26
years ago, as it should have, we would be saving roughly $40 billion annually
today, savings that would continue to compound far into the future.
If we had started the process
back then to raise the retirement age to 70 by 2024, the annual savings in
Medicare would be in excess of $100 billion today and $150 billion in 2024.
Both are still in the CBO
Spending Options book as “options to consider”. Both have laid dormant for an
entire generation. No elected Democrat or Republican public official has
touched that third rail of American politics with a ten-foot pole.
The price of our collective
national political cowardice and procrastination for the past 18 years is $15
trillion of new debt. Had substantive action been taken to reform entitlements
back then, we could have seen balanced budgets every year beyond the four
balanced budgets we saw from 1998 to 2001.
There is only one way to balance
the budget now beyond making major programmatic changes in the major mandatory
programs, Medicare, Medicaid and Social Security. To solve our federal budget
crisis, we simply have to solve our burgeoning health care cost crisis
nationwide. Inflation in federal health programs has averaged 6%+ annual growth
for the past decade.
Spending in all federal health
programs has to be held under 3% annual growth for us to have any chance of
solving our debt crisis. Promising “free health care for all!” as all of the
Democrat presidential candidates are proposing is exactly the wrong way to go
if we are serious about fiscal responsibility.
Ronald Reagan said: “(T)he
trouble with our liberal friends is not that they’re ignorant; it’s that so
much they know isn’t so.”
Based on what we have seen when
it comes to federal budgeting over the past 18 years now and still counting,
apparently this includes our conservative friends as well.
Sadly.
(first published in North State Journal 5/15/19)
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