WSJ Examines Increased Cost of Entitlement Programs

The Wall Street Journal on Friday examined how the "significance" the fiscal year 2007 budget proposal that Bush plans to announce on Monday is "dwarfed by one daunting fact": 84% of the federal budget is "essentially committed" to interest on the federal deficit, defense and homeland security and entitlement programs such as Medicare, Medicaid and Social Security.

Spending on entitlement programs has increased by about 8% annually in recent years, "far faster than either inflation or the economy," and spending on Medicare -- about $391 billion in the current fiscal year -- "is close to equaling the entire domestic discretionary slice of the budget," the Journal reports.

Bush on Tuesday in his State of the Union address proposed to eliminate or reduce spending for 140 federal programs to save $14 billion in FY 2007, but those proposed spending reductions would account for only 0.005% of the federal budget, the Journal reports.

According to the Journal, "By all accounts, a solution to the entitlements spending problem must be bipartisan so that the parties jointly convey the need for sacrifice and share political fallout." However, "the political calendar works against ... Bush achieving" major reforms to entitlement programs, and, in his state of the Union address, he proposed only to establish a bipartisan commission to address the issue, the Journal reports.

Rep. Jim Kolbe (R-Ariz.) said, "This will not get done in this president's term," adding, "Congress is never going to be willing to deal with this, because the members are always up for re-election, every two years."

Meanwhile, Bush has shifted his focus to health care for individuals younger than age 65. In addition, Bush has sought to encourage Medicare beneficiaries to select private health plans for physician, hospital and prescription drug coverage; establish pay-for-performance standards for health care providers who participate in Medicare; and allow states to have more flexibility to administer their Medicaid programs (Calmes, Wall Street Journal, 2/3).