"This thing is eating our lunch," Sen. Bob Kerrey, D-Neb., said, his blue eyes blazing with conviction.
The "thing" worrying Kerrey is the boundless appetite Americans have for ever-more expensive health care and other social benefits that cannot be sustained at today's tax levels."We're bankrupting the country," Kerrey said.
He knows what he is talking about.
Kerrey is co-chairman of a blue-ribbon commission of 32 budget experts that handed down a grim set of conclusions Aug. 8 after months of agonized study and debate. In chilling detail, they left no doubt that unless Washington limits social benefits - especially for health care - the government is headed straight toward bankruptcy.
Among the most eye-catching findings:
- The Social Security Trust Fund is on track to go bankrupt in 2029.
- The Medicare Trust Fund will go bankrupt in 2001.
- Spending on federal health programs has rocketed up by 10 percent annually, even during the past five weak economic years; in fact, Medicare and Medicaid spending have sustained that pace since the mid-1960s.
- Spending on social "entitlements," especially health-benefit programs, combined with interest due on the national debt, is growing so fast that together they will consume all federal tax revenues by 2012. That would leave no money for anything else government does - such as defense, highways, law enforcement and the rest - unless taxes are raised substantially.
One day after Kerrey's panel outlined the depth of the problem, the Senate began debating a bill that threatens to compound it. The measure is the Democrats' crusade to guarantee health insurance to every American and to overhaul the nation's medical system.
To help build political support for their bills, Democrats in both the House and Senate included terms guaranteeing low-cost prescription drugs and taxpayer-subsidized long-term care to the elderly as new "entitlements."
One day after Senate debate began, the nation's most powerful lobby for senior citizens - the American Association of Retired Persons, 33 million strong - endorsed both House and Senate bills, citing the new entitlement benefits for the elderly as the principal reason.
For Kerrey, that sequence sums up precisely why Washington cannot get its act together to impose discipline on spending.
"Because Washington will be influenced by 33 million people over the age of 65 who will respond to the AARP's message and say: We want a prescription benefit, so vote for the (health-reform) bill," Kerrey said in an interview.
AARP is but one of many big lobbies whose pressure for handouts drives the politics of federal bankruptcy, Kerrey made clear. Some AARP members vehemently protested the group's action, but AARP's endorsement illustrates the situation perfectly.
President Clinton was right to insist on overhauling America's health-care system, Kerrey said, but somewhere along the way he switched the focus "from cost containment to universal coverage."
That changed the goal of health reform. Once it was to put a lid on runaway spending; now it is to expand taxpayer-financed subsidies for those who have no health insurance and also to guarantee new benefits as "entitlements" for the elderly and the poor.
Kerrey himself urged much the same thing as a presidential candidate in 1992, but his experience this year as chairman of the Bipartisan Commission on Entitlement and Tax Reform has helped change his perspective.
"Our intuition is to extend more coverage and extend more payment, but it is precisely the wrong thing to do," Kerrey insisted. "If you don't do cost containment first and make it clear that at some point the answer has to be `no,' I mean there is no limit eventually to the definition of health care."
Alice Rivlin, director of the Office of Management and Budget for the Clinton administration, says Kerrey's analysis of the long-term problem is right, but she argues that the Democrats' health-reform bills would help restrain costs at least over the next few years.
"I think there is hope in the shorter run that there is so much waste in the system that we can squeeze down the rate of increase of medical care spending generally as we get a more efficient system," Rivlin said.
"The medical part of the entitlements problem will be eased by health-care reform, but it won't in the long run be solved by it," Rivlin said.