[Congressional Record Volume 141, Number 204 (Tuesday, December 19, 1995)]
[Extensions of Remarks]
[Page E2407]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEDICARE REFORM

                                 ______


                         HON. J. DENNIS HASTERT

                              of illinois

                    in the house of representatives

                       Tuesday, December 19, 1995

  Mr. HASTERT. Mr. Speaker, the following op-ed by Pamela G. Bailey ran 
in the Wall Street Journal on December 19, 1995. As the debate over 
Medicare intensifies, I commend Ms. Bailey's op-ed to my colleagues:

                      Seven Dollars of Separation

                         (By Pamela G. Bailey)

       The Medicare debate reached a new low last week, if such a 
     thing is any longer possible, as the AFL-CIO uncorked a giant 
     media and grassroots campaign to attack 55 House members who 
     support the Republican on Draconian GOP ``cuts'' in Medicare 
     and suggest that there is a huge difference between the 
     Republican plan and the one supported by President Clinton.
       What you would never guess from the AFL-CIO campaign is 
     that the division between the two sides comes down to roughly 
     $7 a month in Medicare premiums. Combined with other reforms, 
     the higher premium for seniors proposed by Republicans will 
     save today's average seven-year-old more than $140,000 in 
     income taxes over the course of this working life. Congress 
     wants to protect our children from this additional tax hit--
     after all, they'll already be paying $300,000 in Medicare 
     payroll taxes over their lifetime. But the president is 
     willing to trade these taxes on our children for a $7-per-
     month break for seniors.
       Despite this superficial difference, the president's new 
     budget has moved to a near embrace of the Republican position 
     on Medicare. Like the Republicans, Mr. Clinton wants to open 
     a failed government program to the choices of the 
     marketplace. And with notable exceptions, his overall budget 
     numbers are within talking distance of the GOP's. It couldn't 
     have come a moment too soon.
       As most people have heard, Medicare Part A--the mandatory, 
     payroll-tax-funded program that pays insurance costs for 
     retirees' hospital, home health, nursing and hospice 
     services--is hurtling toward insolvency and effective 
     shutdown by 2002. And costs for Medicare Part B--the 
     voluntary insurance program that pays doctor, lab, and 
     equipment fees out of general federal revenues and 
     beneficiary premiums--have been rising far faster than the 
     rate of inflation for many years. In its present form, 
     Medicare is quite simply unsustainable, either for the 
     taxpayers who finance it or for the elderly Americans who 
     depend on it. Not much controversy there. And neither, 
     despite all the political noise, is there much controversy 
     over what to do about it.
       Congress's plan to preserve Medicare and restrain its costs 
     involves $1.65 trillion in spending over the next seven 
     years. The president's current plan forecasts $1.68 trillion 
     in spending during the same period--a $30 billion, or less 
     than 2%, difference. Both proposals involve better-than-
     inflation increase in Medicare spending on every enrolled 
     retiree; the Republican budget allows a 62% jump in total 
     spending (to $7,101 per beneficiary per year), for example. 
     And where the basic structure of the program is concerned, 
     the White House and congressional budgets mirror one another 
     in nearly every essential respect. Except one.
       Congress spreads its necessary Medicare savings across 
     every category of program expenditure. The Republican plan 
     brakes projected spending growth on hospitals, doctors, home 
     health providers, nursing homes, lab tests, and medical 
     equipment. And it asks retirees--America's wealthiest age 
     group--to make their own, modest contribution, in the 
     national interest, to the program that benefits them alone. 
     How modest? In the year 2002, at the point where the two 
     competing Medicare proposals most sharply diverge, Congress 
     would have beneficiaries pay a monthly Part B premium $7 
     higher than the administration plan envisions.
       This is a very small amount of money with very large 
     potential consequences. If the president's current veto 
     holds, and Medicare's structure is left unreformed, its Board 
     of Trustees reports that a steep payroll tax increase will be 
     required to pay for future medical services. The current 
     rate, 2.9%, shared evenly between employees and their 
     companies, will necessarily more than double.
       Today's first or second-grader, who enters the labor force 
     in 2010 at age 22, and earns average wages until retiring in 
     2053, will pay $450,314 over his working lifetime in Medicare 
     payroll taxes. And by the same accounting assuming revenues 
     needed to keep Medicare in long-term balance, this 
     hypothetical worker will pay over $200,000 more in lifetime 
     payroll and income taxes under the president's plan--taxes 
     that are unnecessary under the Medicare reform endorsed by 
     Congress. More than two-thirds of this tax difference, or 
     $140,691, is directly attributable to that $7 monthly Part B 
     premium increase.
       Undeterred by these undeniable facts, the AFL-CIO is 
     sending a million pieces of mail into the districts of its 55 
     targeted congressmen, placing 500,000 phone calls, handing 
     out leaflets and staging rallies--all designed to punish 
     these elected officials for approving fictitious ``massive 
     cuts in Medicare'' when they voted for the Republican budget. 
     The labor federation has spent more than $1 million to put 
     individualized television ads on the air against 22 of these 
     House members. Each spot, over video of a worried elderly 
     woman, ominously (and dishonestly) reports that ``he voted to 
     cut Medicare.'' But no one has voted to cut Medicare this 
     year.
       With a provision entirely unrelated to the push for a 
     balanced budget--this treasured program must be fixed and 
     saved whether the budget is balanced or not--Congress has 
     voted to spare the grandchildren of current and future 
     Medicare beneficiaries enough money in taxes to pay for four 
     expensive years of college, or purchase a first home. Is 
     there a grandparent in America who would not pay $7 a month 
     for that?
       Find me one, and I'll eat my hat.