THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, May 2, 1996 TAG: 9605020011
SECTION: FRONT PAGE: A16 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 56 lines
We have seen the future, and it is awash in gray hair and red ink.
President Clinton and congressional Republicans have buried the budget hatchet for this year, but they have put off solving the befuddling Social Security/Medicare/Medicaid mess.
Even as budget negotiators are celebrating, there are troubling reminders that their handiwork is not a permanent fix. Last week, the Medicare Hospital Insurance Trust Fund, which shoulders hospital bills for 37 million elderly and disabled, reported a $4.2 billion loss in the first half of the current fiscal year.
Assessing those losses, the Congressional Budget Office has issued an updated estimate on when the fund will run out of money. The old date was 2002; the new is a year sooner.
Optimists note that such timetables are merely projections, that a tax increase could always save the system, that American ingenuity will out before the elderly are deposited in the streets or their childrens' guest rooms. But a sobering cover article in the May issue of ``Atlantic Monthly'' convincingly counters those feel-good notions.
``Been to Florida lately?'' asks author Peter G. Peterson, a New York investment banker who is the founding president of the austerity-minded Concord Coalition. ``You may not realize it, but you have seen the future - America's future, about two decades from now.''
By 2025, Peterson writes, the proportion of Americans who are elderly will be about the same as in Florida today. Which is to say, nearly one in five. The attendant costs will be staggering, and the proportion of the population asked to shoulder them shrinking.
Already per-capita federal spending on the elderly outstrips federal spending on children by 11 to one. Seniors vote; children don't.
The therapy Peterson prescribes is extensive and painful. But any medicine capable of curing this ill would be. Among the recommendations:
Subject all federal benefits to individuals to an ``affluence test.'' Peterson favors a 10 percent cut in benefits that raise income above $40,000, and an additional 10 percent benefit cut for each added $10,000 in income.
Raise the Social Security retirement age by three months a year until the eligibility age of 70 is reached in 2015.
Mandate personal retirement savings accounts.
Reduce expensive, ``defensive'' treatment of critically ill elderly patients. This could be done in part, he says, by trumpeting living wills, and offering financial incentives for honoring them.
These are drastic measures for a drastic situation. It would make the 1996 presidential campaign historic if such ideas could be debated forthrightly. Americans should reward the candidate who tells them not what they want to hear, but what they ought to know. by CNB