Will President Obama Fulfill His Requirements on Entitlement Reform?
Even as Congress works this week to complete this year’s appropriations bills, thoughts turn to the long-term budget outlook, which under any scenario is far from rosy. Experts generally agree that the growth of the long-term budget deficits is largely a function of entitlements like Social Security, Medicaid, and Medicare; President Obama admitted as much in an interview with the Washington Post shortly before taking office: “The real problem with our long-term deficit actually has to do with our entitlement obligations….The big problem is Medicare, which is unsustainable.” Unfortunately, however, the President signed a health care law that extracted savings from Medicare to create a massive new $2.6 trillion entitlement, relying on double-counting and similar budgetary gimmicks rather than enacting reforms that will make the Medicare program truly sustainable.
This week, however, the President has been granted a second chance to start a conversation about true Medicare reforms that will make the program more sustainable – in fact, he is required by law to do so. The Medicare Modernization Act included provisions requiring the Medicare trustees to determine when the Medicare program is relying too heavily on general revenues (as opposed to the Medicare payroll tax) for its funding needs, thus crowding out other important government priorities such as defense, education, etc. A section on pages 52-55 of last August’s trustees report made such a determination of “excess general revenue Medicare funding” for the fifth straight year. Therefore, under the procedures outlined within the MMA, the President must within 15 days of submitting his budget also propose to Congress legislation remedying the funding warning – to make the program more financially sustainable for current taxpayers and future generations alike. This provision was codified in statute, meaning the President is required to submit a legislative proposal (which the leaders of both parties will formally introduce at his request).
President Obama has talked a lot about entitlement reform, and he has on numerous occasions criticized Republicans for not paying for the cost associated with the MMA (even though Democrats didn’t propose offsets to the bill’s new spending, then or now). He has an opportunity to use one of the tools provided to the President and Congress in the MMA to bring the Medicare program back into balance – one which could reform an entitlement the President himself called “unsustainable.” Will the President embrace this opportunity, or will his response to whether the country should reform its costly entitlement programs once again be the deafening silence of “NO?”