Published in Pawtucket Times on September 10, 2001

Don’t expect quick government action to provide prescription drug benefits to seniors or immediate meaningful Social Security or Medicare reforms soon.  With the backdrop of a $1.35 trillion Bush White House tax cut, a shrinking budget surplus combined with an ailing economy and dwindling consumer confidence, Congress may be forced to take from “Peter to pay Paul.”

But let me give you the political translation…According to a recent released Congression Budget Office (CBO) August 2001 report, the federal government will need to use $9 billion of the tax receipts used to buy bonds invested in the Social Security trust fund in the fiscal year that ends September 30 to made ends meet, increasing the likelihood that heated bipartisan bickering and congressional gridlock will occur when lawmakers being their efforts to pass next year’s 13 spending bills.

Don’t look for things to get better soon, says the nonpartisan CBO, because by 2003 it’s estimated that $18 billion in Social Security reserves will be needed to keep the government in operation.  By 2005, CBO notes that if current tax and spending policies are followed, and the economy performs as the agency estimates, on budget surpluses will emerge.

Senior groups have expressed concern about the federal government having the dip into the cash generated from Social Security payroll taxes, calling it a tragedy that will block passage of any meaningful prescription drug benefit proposals or Medicare and Social Security reforms.  “The loss of tax revenue due to the present’s tax cuts and the slowing economy will lead to new federal debt and $600 billion in additional interest payments over the next ten years,”  predicted Max Richtman, executive director of the Washington D.C. based National Committee to preserve Social Security and Medicare.

“It’s enough to pat for a generous prescription drug benefit under Medicare,” Richtman says.

“Now it looks like the federal government will have to pay bondholders instead of providing seniors with the help they need on prescription drugs, Richtman added, noting that it’s a case of misplaced priorities.

“The $600 billion (in additional interest payments) could fund a prescription drug program with co-payments and deductible at a level that is more affordable for all seniors,”  Richtman says.  Meanwhile, any funds not used could help pay for repair of glasses, refitting dentures and new batteries for hearing aids, all costs not covered by Medicare. 

Adds Ed Zesk, president of Aging 2000, a nonprofit consumer organization focused on improving health care for seniors, “Its is unfortunate that the Bush administration got caught up in tax cut rhetoric to the point where they are focused into a corner and gave a tax cut without accessing its impact on the future of Medicare and Social Security.  While Americans certainly appreciate a few bucks back from Uncle Sam it is a shame that a nation we are potentially mortgaging our future health care and Social Security for a short term tax rebate.

“Clearly the tax cut has made it virtually impossible to develop any kind of meaningful prescription drug proposal for Medicare,”  Zesk told All About Seniors.  “This is just one example of the long-term benefit being sacrificed for the short-term gains,” he says.

Kathleen S. Connell, executive director of AARP Rhode Island, states that  AARP also opposes a federal government raid on the Social Security funds to finance other government programs.  However, the nation’s largest senior advocacy group was pleased that earlier this year both Congress and President Bush had agreed to protect Social Security by using surplus funds in the program for only debt reduction.  “To use the surplus funds other than for debt reduction would undermine that consensus and signal a trend that we believe would not be good economic policy,” Connell said.

According to AARP research, the overall balances for the program funds would not be affected and full benefits could be paid up until 2038, Connell said.  “The key thing that needs to be understood as long as the surplus is used for debt reduction, it would reduce the obligation of future generations and free up money to help the economy.”

With Congress going back into session, lawmakers must now begin the task of passing 13 appropriation bills for the fiscal year beginning October 1.  With the CBO report raising the issue of spending the Social Security receipts, it is now time for Congress to quit finger-pointing and charging each other of raiding the  Social Security and Medicare program.

With the graying of America, Congress must be aside its political differences and work toward long-range bipartisan solutions to ensure the solvency of the Social Security and Medicare programs.  No longer should seniors accept quick political fixes from either political party.