Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 15, 1995 TAG: 9507170026
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: DAN B. FLEMING
DATELINE: LENGTH: Long
Based on conversations with other older Americans, I have found nearly all to be concerned over our growing national debt, and what this could mean for future generations. They are willing to share the financial burden in solving this problem, if the load is spread across all parts of society in an equitable plan.
A disturbing facet so far in this national debate is the lack of accurate information provided to the public. Quite often, politicians and the media imply that those receiving Social Security and Medicare benefits are a group of wealthy old geezers sponging off the public. While this may be true in some cases, 20 percent of those over 65 years of age are below or very near the poverty line, and nearly 75 percent of older American households have incomes below $20,000 when Social Security and Medicare benefits are excluded.
Gingrich claims that Medicare and Medicaid reductions are only a slowing of growth, not really cuts. This is misleading. It ignores the surge of people by the millions who will be over 65 years of age by 2002, and it doesn't consider inflationary costs. An example of what will likely occur if proposed cuts in Medicaid are made is that by 2002, 10 million people will have to be eliminated from Medicaid who would be covered if the current system continued. Many of the poor requiring Medicaid include young children and those in their 80s, 90s, and over 100 years of age. Will state and local governments and charities take care of these millions of people? Will members of Congress today be around in 2002 to explain why this happened?
The Republicans are right that Medicare and Medicaid costs have to be slowed, as President Clinton told us last year. One piece of any solution will require that affluent older Americans will have to pay more for benefits in a modified health-care delivery system. Yet every reputable leader today knows that we really need a reform of the entire health-care system. Unfortunately, Congress finds it easier to slash programs than to address real reform. Another health-care issue being ignored is the prospect of a financial disaster from the staggering costs of long-term care in a nursing home.
Assuming Congress continues along the same path, ignoring real health-care reform while decimating Medicare and Medicaid programs, the tax-fairness issue should be addressed. Are budget cuts to be made on the weakest members of our society, such as children and older Americans living in poverty, and hard-working families barely surviving on minimum-wage salaries with no fringe benefits?
To be fair, Congress should tackle the hidden entitlements of tax breaks and loopholes for corporations and affluent individuals. We need welfare reform for those living in poverty, but we also need a reform of welfare received by wealthy corporations and the rich in the form of these tax breaks and loopholes. According to the Citizens for Tax Justice, these hidden entitlements amount to $455 billion this year.
These entitlements provide benefits to corporations such as accelerated depreciation of machinery and buildings, and deductions for corporate leasing. Under the GOP ``Contract With America,'' these tax breaks will be increased for corporations. There are also tax deals for multinational corporations, and even incentives for American companies to move plants and jobs overseas. There are deductions for eating and entertainment expenses, corporate interest payments and subsidies for mergers and acquisitions. There are special tax deals for oil, gas energy, timber, agricultural and mineral interests. Financial institutions get special breaks, including government bailouts for their bad overseas investments and savings-and-loan failures here at home.
Let's not forget individuals' hidden entitlements, usually the most beneficial to the most affluent members of society. We have tax shelters and tax breaks for pensions and fringe benefits. One of the largest loopholes is the federal subsidy for housing, amounting to $52 billion this year. The deduction for home mortgages allows a person to deduct mortgage interest for a $1 million primary and second home. This leads to the "upside-down" effect - the higher your income and tax bracket, the larger the percentage of your mortgage that is subsidized by the government.
Many hidden entitlements have merit and should be retained in some form. For example, home ownership seems a worthy goal for a subsidy. But should government help underwrite the mortgage interest for a person's $1 million mansion? Should government subsidize the costs of a person's business dinner at the Four Seasons restaurant followed by a subsidy to attend a New York Rangers hockey game?
It doesn't seem unreasonable that in this time of intense scrutiny of government programs, tax deals for corporations and the rich should be on the table for review along with all other programs. Unfortunately, with no real control over campaign spending, powerful special-interest groups that make large campaign contributions to candidates of both political parties are right now working to continue these hidden entitlements, and are seeking even better deals for their clients.
As one of the old geezers who worries over our national debt, I'm willing to do my part, but I would like to see all share in sacrifices to be made.
Dan B. Fleming, of Blacksburg, is associate coordinator for the American Association of Retired Persons/VOTE for the 9th District.
by CNB