Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 9, 1995 TAG: 9505090125
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: From the Los Angeles Times and Newsday
DATELINE: WASHINGTON LENGTH: Long
An influential congressional chairman said Monday that Medicare's age of eligibility should be raised from 65 to 67 in the next century to assure the future solvency of the federal health care program.
``It does not make sense'' for Medicare to be out of step with Social Security, said Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means health subcommittee. Social Security's age for receiving full retirement benefits, now 65, will be increased gradually starting in the year 2000, and will reach age 67 in the year 2027.
The nation must face the demographic reality of the huge Baby Boom generation, and raise the eligibility age for Medicare, or else face a financial crisis for future taxpayers, Thomas said in a speech to the Heritage Foundation, a conservative Washington policy organization.
This is not necessarily an issue for the current Congress, but something the country must grapple with in anticipation of the vast numbers of future retirees, Thomas said.
For the immediate Medicare challenge - bankruptcy of the hospital trust fund in 2002 - Thomas said his subcommittee will be designing a plan in the coming weeks to radically restructure the program and slow its ``outrageous'' 10 percent annual increase in spending.
Thomas warned of the need for financial sacrifices by the 36 million Medicare beneficiaries as well as the doctors and hospitals serving them. This likely means higher co-payments and deductibles by the beneficiaries, and further restraints on payments to doctors and hospitals.
He also wants to bring into the Medicare tax rolls the 3 million state and local employees currently exempted. The Medicare payroll tax is levied on wages, with workers and employers each paying 1.45 percent.
The subcommittee chairman declined to provide any details of the plan under development, admitting that the ``difficult part'' for his subcommittee will be crafting a plan that can win a majority in the House.
An estimated $250 billion to $300 billion over seven years, either in revenues or savings, is required to restore fiscal solvency to the Medicare trust fund. But Thomas and his fellow Republicans have rejected tax increases as a solution to the fiscal gap.
Republicans say the short-term Medicare crisis can be managed by slowing the program's future growth rate from 10 percent a year to 7 percent, with the program spending $1.1 trillion over the next seven years, instead of the $1.4 trillion now projected. But Democratic opponents, supported by senior advocacy groups, doctors and hospitals, claim the changes would harm both the availability and quality of care.
Medicare also was on the agenda in the Senate, where Republicans prepared to unveil today their plan for balancing the federal budget in seven years. Senate Budget Committee members clashed bitterly Monday over tax cuts and the role of the federal government.
The tone of the debate suggested there was little likelihood of compromise between Republicans and Democrats even in the normally genteel Senate. The House Budget Committee on Wednesday will begin crafting its own plan to balance the budget, but one with even deeper cuts than the Senate version.
``The numbers don't lie,'' said Senate Budget Committee Chairman Pete Domenici, R-N.M. ``Our deficit is out of control, and our current path is unacceptable.''
Domenici said his plan would reduce the 10 percent annual growth in Medicare spending to about 7.1 percent, saving about $250 billion over seven years, with the precise changes in Medicare to be determined later by a congressional commission.
Domenici left no room for a tax cut, saying, ``Our first responsibility is to get a balanced budget.'' Yet congressional aides said the plan might save $170 billion in interest that could be used later for tax cuts. And another committee member, Sen. Phil Gramm, R-Texas, a presidential candidate, said he would push for more cuts on the Senate floor to allow for tax cuts.
Democrats reacted with fury and disdain. ``No one here is fooled by their Medicare crocodile tears,'' said Sen. Jim Exon of Nebraska, the budget committee's ranking Democrat, dismissing Republicans' claims of a looming bankruptcy in Medicare. ``They will hack away at Medicare'' to pay for tax cuts, he said.
Sen. Barbara Boxer, D-Calif., used the words ``immoral,'' ``shameful,'' ``stupid'' and ``dumb'' to characterize the Republican plan, which also calls for significant cuts in other nondefense spending. Sen. Patty Murray, D-Wash., said it was a ``Wizard of Oz budget - no heart, no brain, no courage and no home.''
``Our senior citizens are not stupid. Don't insult them,'' Boxer told Domenici. ``Don't say you are saving the system, when you are slashing and burning them.''
Republicans responded that President Clinton and the Democrats were shirking their responsibility merely to score political points.
``The numbers don't lie,'' said Senate Budget Committee Chairman Pete Domenici, R-N.M. ``Our deficit is out of control, and our current path is unacceptable.'' Domenici said his plan would reduce the 10 percent annual growth in Medicare spending to about 7.1 percent, saving about $250 billion over seven years, with the precise changes in Medicare to be determined later by a congressional commission.
Domenici left no room for a tax cut, saying, ``Our first responsibility is to get a balanced budget.'' Yet congressional aides said the plan might save $170 billion in interest that could be used later for tax cuts. And another committee member, Sen. Phil Gramm, R-Texas, a presidential candidate, said he would push for more cuts on the Senate floor to allow for tax cuts.
Democrats reacted with fury and disdain. ``No one here is fooled by their Medicare crocodile tears,'' said Sen. Jim Exon of Nebraska, the budget committee's ranking Democrat, dismissing Republicans' claims of a looming bankruptcy in Medicare. ``They will hack away at Medicare'' to pay for tax cuts, he said.
Sen. Barbara Boxer, D-Calif., used the words ``immoral,'' ``shameful,'' ``stupid'' and ``dumb'' to characterize the Republican plan, which also calls for significant cuts in other non-defense spending. Sen. Patty Murray, D-Wash., said it was a ``Wizard of Oz budget - no heart, no brain, no courage and no home.''
``Our senior citizens are not stupid. Don't insult them,'' Boxer told Domenici. ``Don't say you are saving the system when you are slashing and burning them.''
Republicans responded that President Clinton and the Democrats were shirking their responsibility merely to score political points.
by CNB