June 06, 2020

Politics, economics

Columnists John S. Day (BDN, May 4-5) and David Broder (May 6) have tackled the enormously important problems of the annual U.S. debt and the deficit. Unfortunately, Day seems to have accepted without question the oversimplifications of Ross Perot, Sen. Bob Kerry, and former Sens. Paul Tsongas and Warren Rudman. Broder also is alarmed by the testimony of June O’Neill, director of the Congressional Budget Office, that a fiscal meltdown looms ahead. The alarms sounded by politicians (Republican and Democrat) and budget crunchers are phony. As a Maine resident far from the center of power, I’d like to hear what’s happening behind the scenes, who supports what and why, who gains and who loses.

From reading the Bangor Daily News and other sources, I know there is not one budget, rather there are more than a dozen separate budgets and that each is of major concern to a swarm of competing special interest groups. Take Medicare as just one example. This strange, jerry-built health system for those over 65 is the target of various well-heeled factions. Companies would like to reduce their payroll taxes and paperwork; seniors want to preserve their benefits; insurance companies drool at the possibility of privatizing Medicare; for-profit managed-care organizations love the bottom line; and health providers’ resent losing control of medical decisions.

The situation is complicated by the fact that there are currently two Medicare programs. Part A is hospital insurance and is supported by a mandatory payroll tax which employers and employees pay (whatever the employee’s age). Part A is thus an entitlement, implying a long term obligation of the U.S. government to pay back to seniors most of the costs of hospitalization. Part B, in contrast, is optional supplementary medical insurance for outpatient treatment of certain specified illnesses for limited periods. Seniors who enroll in Part B will pay $42.50 a month this year (deducted painlessly from their Social Security), which is approximately one quarter of the total cost; the remaining three-quarters comes out of general revenues. Thus, as is true of many other federal budgets, the taxes of all of us go to a selected few. When politicians appeal — “Cut Medicare to balance the budget and give the hard working middle class a tax cut.” — many voters agree.

It is easy to see then why there is a stalemate among competing special interest groups about such a complex and confusing program. We need to remind columnists to keep us informed about the realities of politics and economics, how particular programs operate, and who wants to change them. Cut through the 30-second sound bites and the simple solutions to very difficult national problems. Arthur Dole Trenton

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