U.S. Comptroller: Prescription Drug Bill 'May Be The Most Financially Irresponsible Law In 40 Years'

[TexasLawyer]

U.S. COMPTROLLER: PRESCRIPTION DRUG BILL 'MAY BE THE MOST FINANCIALLY IRRESPONSIBLE LAW IN 40 YEARS'; Bill Will Add $8 Trillion to Long-Term Medicare Obligations

Thu Mar 1 2007 13:41:11 ET

That Could Already Bankrupt the U.S.

The U.S. government's top accountant says the law that added a prescription drug benefit to Medicare may be the most financially irresponsible legislation passed since the 1960s. U.S. Comptroller General David Walker says Medicare -- barring vast reform to the program and the nation's healthcare system -- is already on course to possibly bankrupt the treasury and adding the prescription bill just makes the situation worse. Walker appears in a Steve Kroft report to be broadcast on 60 MINUTES Sunday, March 4 (7:00-8:00 PM, ET/PT) on the CBS Television Network.

"The prescription drug bill is probably the most fiscally irresponsible piece of legislation since the 1960s," says Walker, "because we promise way more than we can afford to keep." He argues that the federal government would need to have $8 trillion today, invested at treasury rates, to cover the gap between what the program is expected to take in and what it is expected to cost over the next 75 years Ð and that is in addition to more than $20 trillion that will be needed to pay for other parts of Medicare. "We can't afford to keep the promises we've already made, much less to be piling on top of them," he tells Kroft.

The problem is the baby boomers. The 78 million people born between 1946 and 1964 start becoming eligible for Social Security benefits next year. "They'll be eligible for Medicare just three years later and when those boomers start retiring en masse, then that will be a tsunami of spending that could swamp our ship of state if we don't get serious," says Walker.

As life expectancies increase and the cost of health care continues to rise at twice the rate of inflation, radical reform in health care will be necessary, Walker says. He says the federal government is also going to have to find ways to increase revenue and reduce benefits. The alternative is ugly. Walker shows Kroft General Accounting Office long-term projections that assume the status quo continues, with the same levels of taxation, spending, and economic growth. By the year 2040, Walker says, "If nothing changes, the federal government is not going to be able to do much more than pay interest on the mounting debt and some entitlement benefits. It won't have money left for anything else...."

<snip>

http://www.drudgereport.com/flash3.htm

[denverbill]

1. Nah. Deficits don't matter. Republicans taught me that.

They also taught me that cutting taxes increases revenue.

My solution is to cut Medicare taxes and Social Security taxes. Problem solved. </thinking like a Republican>

Amazing isn't it? They NEVER suggest cutting Medicare or SS taxes to 'solve' that problem. But cutting taxes on capital gains and dividends, or cutting tax rates for the rich? THAT increases revenue somehow. Funny how that 'revenue increase' always leaves us with ENORMOUS budget deficits.

[rcdean]

3. Well said. Plus we should never negotiate prices...

Caving in to oligopolies is healthy for the market. (not!)

[truthisfreedom]

2. If you believe grudge.

We face the same problem as many other nations... we are aging, and we don't really have any way to keep everything going without a huge youthful population to pay the bills by paying extraordinary taxes. Basically, we need some horrible calamity (bird flu, some other natural event) to kill off all of the old people if we expect to keep going the way we have been. Either that, or we seize the pharmaceutical companies and make them all non-profit.

[toopers]

9. Bernanke said the same thing on Wednesday . . .

and Greenspan said the same thing before Bernanke

[terisan]

4. What is the Iraq War Debt OK but Social Security "debt" not OK ?

The Iraq war and Homeland Security budgets are massive "Public Work" projects for certain corporations, as is the Prescription Drug benefit.

[lovuian]

5. all money for pharmaceuticals keep em pill popping

its ridiculous

[madrchsod]

6. i doubt there will be a lot of us retiring and living off

our savings,social security,pensions,etc...no a good many of us will be working way past 62-65. when we are working we`ll still pay taxes. ya that american dream that my parents enjoyed is no longer a dream for tens of millions of people my age. it`s the new american dream --eat shit and die

[greenissexy]

7. At least the money helps people.

It's better than most of the money Bush throws away. I know several people that are helped by this program. Complain about the money that is wasted, not that that ends-up back in the hands of people that need it.

[xchrom]

8. gasp -- noooo!!! who would have guessed?

There are massive screw ups to that fucked up system -- and like the build-up to the iraq war -- we never hear about it.

socialize health care now!

[grasswire]

10. just means test, dammit

Every other program is means tested. Student loans, food stamps, yada yada yada.

Just means test for medicare.

[Jacobin]

11. How about a windfall profits tax on pharmaceutical companies

since they are going to be getting those trillions...instead of negotiating the prices which the government is prohibited from doing under bush's bill