(C) Common Dreams
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How Medicare, Medicaid, and Social Security are Driving the National Debt — and How We Can Fix It [1]
['A Conversation With Maya Macguineas', 'President Of The Committee For A Responsible Federal Budget']
Date: 2023-03
Maya MacGuineas is a warrior for stewardship. In her case, stewardship of America’s fiscal resources. As president of the Committee for a Responsible Federal Budget, MacGuineas leads an organization that helps analyze and develop policies to control deficit spending and the nation’s federal debt, which is the accumulation of all our deficits over time.
In this interview with Catalyst Editor William McKenzie, she explains the threat the debt poses to valuable programs like Social Security and Medicare but also to our ability to deal with over-the-horizon problems such as having enough dollars to educate a modern workforce. After working on fiscal issues for two decades, MacGuineas contends that controlling the debt must begin with strong political leadership.
Let’s start with some facts. What types of spending are really driving up the federal debt, which is now close to $23 trillion and grew 78 percent from 2010 thru 2019?
The biggest drivers on the spending side are without question the aging of the population and health care costs. Those two things have caused growth in our biggest programs — Social Security, Medicare, and Medicaid — and they are eclipsing economic growth and are likely to do so going forward. Another factor putting upward pressure is we have been borrowing so much. Interest payments are now the fastest-growing part of our federal budget.
Your organization recently posted a piece about Congress considering several proposals that could reduce health care costs by as much as $900 billion over the next decade. For example, one proposal on your site is about limiting the rise of prescription drug prices to the inflation rate of Medicare and Medicaid. How feasible is that? How would it work?
This is feasible if they make it part of the regulatory process. There are arguments that it will have an impact on innovation and on the industry’s willingness to research new drugs. But those who finance the system, whether it is Medicare or insurers, can put limits on how much they will support the growing costs of prescription drugs. This is a place where there is bipartisan momentum. You might see some things coming along this spring.
Senators Mitt Romney, R-Utah, and Joe Manchin, D- West Virginia, are working on bipartisan legislation to deal with the trust funds that govern our highway spending as well as Medicare hospital spending. What is the significance of that effort?
The TRUST Act is one of the most exciting things going on up on the Hill. The bill is supported by a number of bipartisan, bicameral leaders who are fed up with kicking the can and ignoring the major problems in our largest programs such as Social Security and Medicare.
They have developed legislation that would require that anytime a trust fund gets out of balance, which is defined as being insolvent in the next 15 years, Congress must create a commission to study the issue and recommend solutions. It doesn’t say what those solutions are. I am sure the co-sponsors will have different ideas about them. But the bury-your-head-in-the-sand approach that Congress has taken on these big programs have left the programs so vulnerable and weak that they are going to really harm people who depend upon them if we don’t take measures to shore them up quickly.
The [TRUST Act] is supported by a number of bipartisan, bicameral leaders who are fed up with kicking the can and ignoring the major problems in our largest programs such as Social Security and Medicare.
Along these lines, there have been a number of proposals to change how we do federal budgeting. To what extent would changes in how we budget lead to some control of the debt?
Budget process could be the nudge that gets everything back on track, or it could be a total political punt.
A lot of people support budget process reform because they don’t want to deal with the underlying policy issue of what to do with spending and revenues. On the other hand, it could have profound effects. A lot of politicians want to do more on the issue. They face resistance from within their party, members of the other party, or within leadership, and budget process reform is a way to tip-toe into this area.
We should never allow our country to operate without a budget, which is something we do now. That is inconceivable. Even if you run a small company, you would be out in seconds if you suggested running your operation with no budget in place.
Even if you run a small company, you would be out in seconds if you suggested running your operation with no budget in place.
Our budget doesn’t have any real constraints, so a really good idea is to add debt targets for every year. You would have goals about what share of the economy the debt should be. Then, when the budget is presented by the White House and Congress, it would have to meet those goals. Legislators could fight about how you get there, but putting in place a fiscal goal like that could gradually drag us back in a healthy direction.
Another idea is that if they don’t pass a budget, which is more common in recent years, an automatic continuing resolution would go into effect so you don’t have to shut down the government. That is one of the stupidest, most self-defeating situations we have been falling into in recent years – you can’t agree at work so shut the operation down? This would not fly in any other company or sector.
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[1] Url:
https://www.bushcenter.org/catalyst/federal-debt/macguineas-medicaid-medicare-social-security-national-debt
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