At least they noticed
There’s been scant mention of the Medicare Trustees’ recent warning that Medicare will soon derive more than 45 percent of its funds from general revenues. That warning is significant because it is meant to trigger essentially automatic cuts once the threshold is met, but most reporters have focused on the news of when the so-called Medicare trust funds will run out of money.
The New York Times ran an editorial on the topic today (Medicare’s Shrinking Options). They’re not happy about the 45 percent cap:
[T]he cap on general revenues, generated mostly by federal income taxes, removes the most progressive source of financing from further consideration. That leaves only the regressive Medicare payroll tax, increases in premiums and co-payments, or cuts in services or payments to providers on the table.
Some critics charge that the 45 percent threshold was imposed to rule out any attempt to scale back the president’s huge tax cuts for the wealthy and divert the money to Medicare. Intended or not, that will be the effect, and it is not one that most American voters would endorse.
They may be right about the motivations behind the cap. But here’s my beef: Why should Medicare –a non-means tested program for the elderly (and disabled)– suck up so much general revenue in the first place? I think voters will be upset when they learn that Medicare is crowding out means-tested social expenditures.May 4, 2006