Medicare Trigger Set
by John Goodman

The same law that gave us Medicare prescription drugs says that if Medicare's finances deteriorate sufficiently the President must propose a remedy and Congress must expedite its consideration. In releasing its annual report early this month, the Medicare Trustees announced that this financial "trigger" has been hit.

How dire are things? Very dire. Once the baby boomers begin to retire, the federal government will face a cash flow nightmare:

• In just five years, the government will have to stop doing one in every ten (non-entitlement) things it has been doing in order to keep its promises to the elderly.
• In 13 years, the government will have to stop doing one in every four things it currently does.
• And this forecast does not even include the impact of baby boomers on Medicaid, which is almost as big as Medicare.

All of this is spelled out in a terrific editorial by Professor Thomas Saving in the May 9, 2007 Wall Street Journal. Read it carefully (http://www.ncpa.org/email/050907-saving-oped.pdf) because you are unlikely to read about this problem anywhere else.

In its story about the Trustees Report, The New York Times mentioned the "trigger" in paragraph 14. The Washington Post had it in paragraph 9. In journalism, this is called burying the lead. In lay language, it is called missing the point.

One place the point has not been missed is on The New York Times editorial page, which rarely passes up any occasion to undermine efforts to bring the facts to light. The Times editorial writers, who apparently think the government can pay medical bills with IOUs it writes to itself, have bemoaned on several occasions about President Bush's reappointment of Saving and Syracuse University Professor John Palmer as Public Trustees of Social Security and Medicare. These two, originally appointed by President Clinton, have made an obvious impact on Trustee reporting: the reports now include the present value of the programs' unfunded liabilities and the impact of the cash flow deficits on government finances.

The latest Times editorial lamented that there even is a trigger. Why get distracted by cash flow deficits when the obvious solution... (after we run out of IOUs)...to this and all other financial problems is...to tax the rich.

Cest la vie.

John C. Goodman is President of the National Center for Policy Analysis.