Articles

The President's Medicare Abdication

June 08, 2011

Barack Obama told his staff the day after he was inaugurated that "transparency and the rule of law" would be his presidency's "touchstones." In the case of Medicare, they haven't been.

Mr. Obama has ignored a law requiring he send Congress a plan to strengthen Medicare's finances?even though members of his own cabinet have reminded him in writing of his duty to do so.

Medicare was originally designed to be paid for mostly by special dedicated taxes. Yet it has become increasingly dependent on general revenues as expenses have far outrun both projections and Medicare tax receipts. By 2024, according to the annual report of the Medicare trustees, the hospital insurance trust fund will be exhausted.

To force Washington to take action before Medicare overwhelms the federal budget, fiscal experts wrote a presidential obligation into the Medicare Reform Act of 2003. Under that provision, if Medicare's trustees forecast that general revenues will be required for 45% or more of the program's outlays within a seven-year period, then the president must propose legislation to correct the problem within 15 days of his next budget submission. Congress then has to give the proposal expedited consideration.

In their annual report this spring, Medicare's trustees?who include four members of Mr. Obama's cabinet as well as two outside experts?said "the threshold was in fact breached" during the last fiscal year and "a Presidential proposal is required by law in response." As, indeed, one was required in 2010 as well. The Democratic majority waived the requirement during the last Congress, but it remains in force this year. The president has continued ignoring the law, failing to send Congress a plan to fix Medicare's finances.

This isn't the only law the president has disregarded. For example, Mr. Obama has also ignored the War Powers Act's requirement that the president seek congressional approval for any military action lasting more than 60 days. One can imagine the uproar on Capitol Hill and among liberal editorial writers if Mr. Obama's predecessor had ignored the War Powers Act in Afghanistan and Iraq or unilaterally decided he would turn a blind eye to a longstanding law.

The president, a former University of Chicago lecturer on constitutional law, sees the statute books as a legal cafeteria from which he can pick laws he will and won't follow. A largely compliant media and acquiescing congressional Democratic allies let him get away with making a mockery of his pledge of "transparency and the rule of law."

The Medicare trust fund situation also shows how politically the Obama White House views virtually every major public policy issue. Mr. Obama apparently wants to keep Medicare as an issue to beat up Republicans in the 2012 campaign, protect congressional Democrats from tough votes in the months before the next election, and avoid injecting any controversial subjects into the mix that might harm his chances for a second term.

What are the consequences to our country of Mr. Obama's inaction? No one can deny that Medicare is on the path to fiscal collapse. Its trust fund is emptying out and its unfunded liabilities are nearly $25 trillion over the lifetime of those who are now workers and retirees, according to Medicare's actuaries.

Yet the president has done nothing to correct this long-term problem?the Medicare trustees' report looks at Medicare finances after the cuts in spending that were written into ObamaCare. Valuable time is being squandered as Mr. Obama pushes the issue off the agenda until after the next election.

History often thrusts big decisions into a president's inbox. It's no different with Mr. Obama. Today the cost of America's unsustainable entitlements is leading to ruin. Mr. Obama has backed away from tackling this issue, even at the expense of ignoring the law. The country will pay a big price.

This article originally appeared on WSJ.com on Wednesday, June 8, 2011.

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