Top Democrats Propose Debt Reduction Plan with Medicare Surplus
The Congressional Budget Office today will likely release updated economic projections forecasting the federal budget surplus as $5.6 trillion over the next decade -- prompting debate in Congress over how to handle the Medicare surplus, CongressDaily/A.M. reports. While Republican leaders want to move on President Bush's $1.6 trillion tax-cut package, House Budget Committee ranking member John Spratt (D-S.C.) and Senate Budget Committee ranking member Kent Conrad (D-N.D.) called yesterday for "walling off" the Social Security and Medicare Part A trust fund surpluses and using those funds to "pay down" the national debt. Spratt and Conrad suggested dividing the remaining surplus into thirds -- one third for tax cuts; one third for spending on "high-priority domestic initiatives," such as a Medicare prescription drug benefit; and one third for a "strategic reserve fund." However, Senate Budget Committee Chair Pete Domenici (R-N.M.) said that "lock-boxing" Medicare trust fund surpluses would prove "a very difficult decision politically." He added that if lawmakers "set aside" the Medicare surplus, he would favor using the funds to establish a Medicare prescription drug benefit, while Democrats would spend the funds to pay down the national debt. (Caruso, CongressDaily/A.M., 1/31).
Meanwhile, White House Press Secretary Ari Fleischer indicated yesterday that President Bush opposes Democratic plans to establish a "Medicare lock box" by using future Medicare surpluses to pay down the national debt, CongressDaily reports. According to Fleisher, Bush favors using the Medicare surplus to establish a prescription drug benefit. "The president believes that every dollar of Medicare should be used for Medicare," Fleischer said, adding, "If we can use the Medicare surplus to help bring prescription drugs to seniors, we ought to do that, as opposed to using Medicare money to pay off bonds -- to pay money to bondholders." Fleischer called the proposal "a lockbox of sorts," pointing out that the government would reserve the funds for Medicare(CongressDaily, 1/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.