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Jewish World Review Oct. 14, 2008 / 15 Tishrei 5769 The next, bigger bailout is Medicare By William McKenzie http://www.JewishWorldReview.com | If you think this current $700 billion financial bailout is troubling, you haven't seen anything yet. It's just a warm-up act to what we face if Washington doesn't come to terms with Medicare's looming bankruptcy. That must be why we hear so little about Medicare's finances from Congress, most reporters or the presidential candidates. The tendency is to avert our eyes when faced with a crisis that will add trillions of dollars to what's already a $9 trillion debt. My new hero, Michael Leavitt, isn't ducking, though. The secretary of health and human services is a prophet in pinstripes. As the person in charge of our health care system, the former Utah governor is traveling the country talking about this disaster in the making. Too strong? Hardly. Medicare's hospital trust fund will go bankrupt in 2019, and there is no plan to keep it afloat. (For comparison, this catastrophe will hit 20 years earlier than Social Security's coming insolvency.) When we spoke Friday about Medicare's finances, Leavitt, tall and unassuming, described Congress' bailout of the financial industry as "a walk in the park in a soft spring rain" compared with Medicare. This federal program, focused on doctor visits, hospital care and medicines for senior citizens, faces two inescapable problems: _There will be too few workers to pay for the benefits Medicare has promised today's workers. Right now, there are about four workers for every Medicare beneficiary. In 20 years, that ratio falls to about 2.5. _Second, benefit costs will explode in inverse proportion to that dwindling work force. Leavitt projects that Medicare will rise from about 13 percent of federal spending today to about 23 percent in 20 years. In sum: "Higher and higher costs are being borne by fewer and fewer workers." If we don't recognize those realities, banks around the world will notice for us. Just as they worried about mortgages dragging down financial houses, they'll take their money elsewhere instead of buying up our long-term debt. Why should they, when we show no signs of dealing with Medicare, preferring to drive up the federal debt? And Leavitt is right that we have missed a chance in this election to have a more serious debate about health care. John McCain is the candidate who made spending restraint an issue and took tough votes to control Medicare's growth. Yet he hasn't made entitlement reform the centerpiece of his economic plans, as Ross Perot did. That's unfortunate, because he could have used it to show that he would take on problems no one else would touch. Thankfully, Leavitt has a solution that doesn't require benevolent statesmen, only each party's self-interest. Legislators would buy into it when they realized that the costs of not acting would be far worse – for them. His idea would work this way: Democrats and Republicans would agree that if Medicare spending increases from around 3.2 percent of the gross domestic product today to, say, 4 percent of GDP in the future, Congress automatically would set up a commission similar to the one used to close down unnecessary military bases. The commission would design a plan to curb Medicare's costs. This could require changes in how much hospitals and doctors get paid, as well as reductions in benefits for wealthier beneficiaries. Medicare is a technical program, so there are plenty of places to start tinkering. Once that's done, the president receives the report and must accept it in full or reject it. If accepted, Congress votes up or down on the package. If the plan gets turned down, a set of default reforms would go into effect. As unsettling as this problem is, I felt enthused for the first time in a decade after hearing from Leavitt. There actually is a way to reform Medicare. With the financial bailout signed into law, why don't we start talking about this one? Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. William McKenzie is an editorial columnist for The Dallas Morning News. Comment by clicking here. 10/02/08: McCain would be wiser on regulation 08/27/08: Can Obama score among ‘values voters’? 08/20/08: McCain needs to push health care edge 08/06/08: How Bush can help McCain 04/09/08: To win, McCain must take his party in a bold, daring direction 03/26/08: To win, McCain must take his party in a bold, daring direction 01/30/08: Finally, Bush speaks up for relevancy 01/24/08: After Bush, who's going to crusade for education? 12/20/07: Candidates who prey on fears may generate votes at this moment in our cycle, but we really need to think hard about how far inward we turn 10/30/07: Is America building an empire? That is a central question for the next presidents 08/28/07: Don't let Gonzales' record taint all Bush appointees 08/16/07: Rove was half right: He got the big picture, but didn't belong in the White House 02/01/06: GOP needs changes, but it can't forget the big picture 03/31/05: Mexico fixes problems when it wants to 12/06/04: Bush's new team has a Texas feel 11/08/04: Second chances shouldn't be wasted 08/25/04: Bush could profit from being like Ike © 2008, The Dallas Morning News Distributed by McClatchy-Tribune Information Services.

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