Washington
On July 30, the day the Medicare program celebrated its 39th
birthday since being signed into law in 1965, the White House
Office of Management and Budget (OMB) increased its spending
estimate for the massive program by more than $67 billion over the
next five years. According to the OMB, up to $19 billion of those
outlays link directly or indirectly to the Medicare Modernization
Act (MMA).
The new estimate is included in the OMB's “Fiscal Year
2005, Mid-Session Review,” which predicts that the federal
budget deficit will be $445 billion in 2005. “The real fiscal
danger is uncontrolled growth in major entitlement programs,”
the report said, noting that Medicare and Medicaid pose
“severe budgetary challenges in the decades ahead in the
absence of policy action.” The report predicted that the
government will spend $290.4 billion on Medicare in fiscal 2005 and
$345.2 billion in fiscal 2006 as the MMA's prescription drug
benefit rolls out.
“Those who claim the new [Medicare] benefits are
inadequate have to face reality,” said Senate Finance
Committee Chairman Chuck Grassley, R-Iowa, in a statement noting
the program's birthday. “There is no bottomless source of
cash for Medicare benefits … While Medicare benefits should
be generous, they also have to be sustainable and affordable for
beneficiaries.”
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