On My Mind This Morning -- Rostenkowski's Limo

Fri, 22 Aug 2008 15:57:02 +0000

There used to be a time when elected officials didn't seek to break the budget even when expanding federal spending. In this respect, the Medicare Catstrophic Coverage Act of 1988 is instructive. Here is (an excerpt of) what President Reagan said when he signed it:

[I]n a moment, I will sign the Medicare Catastrophic Coverage Act of 1988. This legislation will help remove a terrible threat from the lives of elderly and disabled Americans, the threat of an illness requiring acute care, one so devastating that it could wipe out the savings of an entire lifetime. The scene is only too easy to picture. An elderly couple, perhaps one has a very long stay in the hospital; the other forced to empty the savings account, to skimp on groceries. And even for those never actually forced into this situation, there's the gnawing worry, the fear, that someday it might just happen. This legislation will change that, replacing worry and fear with peace of mind.

I'm proud to be able to note that the legislation follows the same premise as all sound insurance programs. It will be paid for by those who are covered by its services. Even so, I must add a word of caution. Every administration since the Medicare program was passed has worried about the seemingly uncontrollable cost increases in our government health care programs. Whoever the President in office, program costs have exceeded the best congressional budget estimates. Unless we're careful, it's possible that aspects of this legislation will do the same.

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In particular, the legislation provides many new benefits, benefits like respite care and prescription drugs. Since these have never been covered by Medicare, we have no real way of knowing how much these services will cost. So, if future administrations and Congresses aren't diligent, these new benefits could contribute to a program we can't afford. This could be more than a budget problem; it could be a tragedy. The program, after all, is to be paid for by the elderly themselves. So, we must control the costs of these new benefits, or we'll harm the very people we're trying to help. And yet, if administered with prudence, this program can, as I said, provide countless Americans with peace of mind.

That seems like a measured approach to expanding social insurance and financing those expansions. For those of you who don't remember what happened thereafter, here's one account from the AP in August 1989, "House Panel Leader Jeered by Elderly in Chicago:"

Representative Dan Rostenkowski of Illinois, one of the most powerful members of Congress, was booed and followed down the street by a group of screaming elderly people Thursday as he left a meeting with community leaders opposed to his stance on a program intended to protect the elderly from the high costs of extended illnesses.

Several dozen people shouted ''Liar!'' ''Impeach!'' and ''Recall!'' when Mr. Rostenkowski, the Democrat who heads the House Ways and Means Committee, left a community center in the North Side district of Chicago that he has represented for 30 years.

The group briefly blocked his car, hitting it with picket signs and pounding on the windows. Mr. Rostenkowski got out of the car and walked briskly down the street for about a block, with the protesters in pursuit. The driver then drove the car to a gasoline station, the Congressman got back in and the car sped away.

As he walked down the street, Mr. Rostenkowski said, ''I don't think they understand what's going on. That's too bad.''

The incident occurred after Mr. Rostenkowski discussed his support for the Catastrophic Coverage Act of 1988 in a private meeting with representatives of six organizations for the elderly.

The Act was repealed in November of 1989. From this, politicians learned that expansions to social insurance had to be financed by future taxpayers. Look what happened in the Medicare Modernization Act of 2003--a president who campaigned on a claim that the unfunded obligations in Social Security were so large as to require reform signed legislation that blew an even larger hole open in Medicare's long-term obligations.

For better or for worse, politicians seem to give us what we demand.