Monday, April 9, 2012 11:55 AM
Dear Mr. Kroll,
Thank you for contacting me regarding Social Security, Medicare, and Medicaid. This is a complicated issue and I appreciate having the benefit of your thoughts.
The current budget situation is critical and the numbers are unfathomable. Over the next several years we will add trillion-dollar deficits to our already growing $14 trillion debt. As a result, we have left ourselves and future generations far too dependent on our creditors; 40 percent of whom are foreign governments. In the coming years, our debt will eclipse our entire economy, and grow to catastrophic levels. On our current path, future generations will see both the Federal government, and the taxes needed to support it, double in size.
Since taking office, President Obama has signed into law spending increases of nearly 25 percent for domestic government agencies – an 84 percent increase when you include the failed stimulus. All of this new government spending was sold to the Congress and the American people as "investment." Yet after two years, the unemployment rate remains above 9 percent and government has added over $3 trillion to our debt. These numbers do not even include the new open-ended health care entitlement program.
As this year's budget process has been complicated, let me first clear up some of the confusion. In Fiscal Year (FY) 2010, the U.S. Government spent $3.5 trillion and collected only $2.2 trillion in revenue, resulting in a budget deficit of $1.3 trillion (8.9 percent of U.S. GDP). On April 15, 2011, the House passed H.Con.Res34, to establish a budgetary framework for FY2012 and outline appropriate budgetary levels for FY2013 through FY2021. I supported this budgetary guide because it takes the U.S.off the path of destruction we are currently following and it puts us on a path to prosperity. One major issue of contention with H.Con.Res.34 is with the Medicare and Medicaid reform provisions.
As it now stands, Medicare is unsustainable; it grows at 7 percent per year. By 2020, the Medicare program will become insolvent and by 2037, in large part due to Medicare and other entitlements, our budget will be 200 percent the size of the U.S.economy. By comparison, Greece's economy collapsed when its budget was 113-150 percent the size of its economy. If we are to keep Medicare running and save this country from crushing debt and economic ruin, some reforms must be considered.
H.Con.Res. 34 proposes to create a plan which uses a "premium support" payment, similar to what Members of Congress and all Federal employees have, to allow people to choose from a variety of health care plans. Under this proposal, no one over the age of 55 will be affected; their benefits are 100 percent preserved and their coverage will not be changed. However, for those under the age of 55, Congress must begin to restructure the program. If Congress does not make changes to Medicare, then by the time my children are ready to start using Medicare and my grandchildren are in their 30's and 40's, there will be no Medicare. New seniors, those under 55, may have to pay a little more for health insurance in 2020. However, if nothing is done, seniors will eventually have to pay for ALL health insurance themselves.
As for Medicaid, this budget converts the Federal share of Medicaid spending into a block grant that lets States create a range of options and gives Medicaid patients access to better care. The budget proposes similar reforms to food stamps, ending the flawed incentive structure that rewards states for adding to the program's rolls. Please know that this budget does NOT make these reforms law. It merely outlines a framework through which Medicare could be reformed. As Congress debates the details, I will ensure that Alaskans are not forgotten.
On August 1, 2011, with the debt-ceiling default date just a day away, the House debated S. 365, the Budget Control Act of 2011. This fiercely-negotiated, bipartisan compromise between the House, Senate, and the President, passed the House by a vote of 261-161, the Senate by a vote of 74-26, and was signed into law on August 2, 2011. Given the extraordinary measures it took to reach this agreement, I believe this was the only bill that could have passed both the House and Senate chambers.
S. 365 was a fair compromise. It contained more spending reductions than debt limit increase and it imposed spending caps that would set clear limits on future spending and serve as a barrier against government expansion while the economy grows. Additionally, S. 365 created a Joint Committee on Deficit Reduction, which was tasked with producing a proposal to reduce the deficit by at least $1.5 trillion over 10 years, and it required the consideration of a Balanced Budget Amendment by both the House and Senate. This legislation contained no tax increases, provided a means to prevent a future default, and exempted Social Security, Medicaid, veterans, and civil and military pay.
Once again, thank you for expressing your views on this issue. If you haven't already, I would encourage you to sign up for my e-newsletter at http://donyoung.house.gov/Forms/EmailSignup/ and my YouTube channel at http://www.youtube.com/profile?user=RepDonYoung. Doing so will allow me to provide you with updates on this and other important issues. If I can be of any assistance in the future, please do not hesitate to contact me.
Congressman for All Alaska