Congress Can't Say No
Democratic lawmakers and special interests have joined forces to balloon prices in such areas as health care and college tuition
DEMOCRATIC candidates who needed an extra boost to put themselves over the top have been able to get it by scaring the old folks as President Lyndon Johnson did with a classic 1964 ad that showed a man tearing up his Social Security card. It's the Democrats' version of the race card that has worked so well for Republicans. It has shielded congressional Democrats from criticism they richly deserve for blocking effective controls on Medicare and Medicaid costs for the last 25 years.Skip to next paragraph
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As a result, health costs fueled our inflationary spiral as the share of the gross national product spent on health care rose from 5.9 percent in 1965, the year the Medicare/Medicaid plan was enacted, to 12.3 percent by 1990. It's expected to hit 16.4 percent by 2000.
Congress set off a parallel spiral of inflation in college tuition when it guaranteed billions in student loans in the late 1980s.
The message is simple. Pumping billions of federal dollars into the public sector without effective cost controls at the other end drives up costs in ways no one imagined. But lawmakers fear defeat at the polls if they upset senior citizens or educators by putting on effective controls.
The best example of how dangerous it is to cross voters on what are called "entitlement" programs was the 1986 off-year election. That year, Democrats recaptured the Senate by picking up 10 seats, six by very narrow margins in states where Republican incumbents were accused of voting to freeze cost-of-living allowances (COLAs) for senior citizens and federal retirees.
You may recall the Senate vote on the budget resolution in 1985. The measure called for a one-year freeze on cost-of-living increases. Its sponsors claimed it would save enough money to balance the budget in a few years. The vote was so close Senate Majority Leader Robert Dole (R) of Kansas had then-Sen. Pete Wilson (R) of California brought from his hospital bed in a wheel chair at 1 a.m. to cast the deciding vote.
Senator Dole won that night, but it was a futile effort. The Democratic House refused to go along, and former President Ronald Reagan, never overly concerned with the deficit, bargained Dole's victory away.
The last weekend of the 1986 campaign, Democrats flooded television screens with ads accusing GOP senators of voting to cut the COLAs of seniors and retirees. The Democrats might have won the seats anyway. Who knows? We do know there are no Republicans around willing to chance offending senior citizens.
CONGRESS has known Medicare/Medicaid costs are driving the rate of inflation in health care since 1967, the first full year of the programs. That year, I asked Sen. Joe Montoya (D) of New Mexico, a member of the Senate Appropriations Committee, if the new round of inflation was caused by our military buildup in South Vietnam. "No," he said, looking a bit troubled, "it's the Medicare program that's causing it." That year, the inflation rate in Medicare was 57 percent.
It didn't stay that high. It settled down at two to three times the rate of the consumer price index for 21 of the next 25 years.
In 1985, for example, the CPI rose 3.6 percent and medical care 6.3, Medicare 14.3 and Medicaid 10.7. Lately, Medicaid has set the pace, in part because of the high cost of funding new mandates that made large numbers of additional children eligible for Medicaid.
Congress doesn't learn by its mistakes. Its decision in the Carter years to guarantee billions in student loans without needed controls at the other end let colleges put fat in their budgets by hiking tuition and fees.
A new study says public college tuition and fees rose 141 percent in from 1980-90, while the CPI rose 63.6 percent. This year, tuition will go up 11 percent at public and 7 percent at private colleges, while inflation hovers at 3 percent.
Sadly enough, while tuition goes up, tenured teachers teach less, classes are over enrolled, and departments eliminated.
Examples of runaway costs don't worry the tax-and-spend wing of the Democratic Party. It would have introduced inflation into child care with a $700 million subsidy program, but President Bush threatened to veto the bill. So Congress agreed to a Republican plan built on tax credits for low-income families.
The failure to control costs is tied to the influence special interest groups have in Democratic circles. The Trial Lawyers Association, for example, blocked medical malpractice reform. In the 1989-90 cycle, TLA's political action committee gave $1.3 million of its $1.5 million to Democrats who do its bidding.
Former Surgeon General C. Everett Koop says 25 percent of health expenditures are unnecessary. He says "defensive medicine is responsible for much of these costs." Dr. Koop backs a plan to make arbitration an alternative to litigation, but TLA opposes it, so it has been buried by a Democratic Congress.
One cost-control proposal excites Congress. It promises to save billions by cutting down on "paperwork," a euphemism for bureaucracy and therefore a sage but legitimate target.
Of the proposals for health-care reform, only a single-payer plan, a euphemism for a government program run by politicians, would add Medicare/Medicaid to a health plan that covers the general public. Can anyone honestly say Congress would control the costs of such a program? The answer is "no." Neither Mr. Bush nor Bill Clinton includes Medicare/ Medicaid recipients in his plan.
For the rest of us, they want to hand the cost-control problem off to private insurers, but insurers won't be able to go to the source of the problem - the refusal of Democrats in Congress to control the costs of entitlement programs. It might, after all, cost them some votes.