As political focus moves from sequestration to the Continuing Resolution (CR) vote in the House later this week, and for funding the federal government for the rest of the 2013 Fiscal Year, the House and Senate are also quietly moving to pass budget resolutions through their respective chambers. Politico reports that one controversial measure is already being proposed by House Budget Committee Chairman Paul Ryan (R-WI) – enacting Medicare changes for those Americans aged 56 or older, as opposed to past plans that focused on Americans 55 or older.
The article is worth reading in full, if only to better understand the inane way Washington media and politicians view such a change. In the Beltway, the focus is always on the politics of such a policy choice. It’s on who will ally with whom, how it will offend this constituency, how many enemies it will create, etc. Yet Politico and most others in Washington will ignore two mathematical reasons why – assuming one supports Chairman Ryan’s proposed changes to Medicare – this change makes sense.
First, simply, we are one year past the last House budget, which aimed at changes for people 54 and younger. We are two years past the original House budget proposed by Chairman Ryan. Considering Medicare is projected to be unable to provide the full level of promised benefits in 2024, such a change by Chairman Ryan makes sense if changes to Medicare are to take effect in time to have any impact before the program’s Trust Fund expires.
Second, on their current trajectories, interest payments combined with Social Security and Medicare are going to skyrocket somewhere around 2020 or shortly thereafter. (Interest rates will jump earlier if we continue to add debt at the current rate, or if our economy improves.) While a one-year change to who gets affected by the House Budget Committee resolution is unlikely to make a dramatic change in the long run (we’ll have to wait for the Congressional Budget Office to run the official numbers), it will have some effect on the long-term crisis facing America. A crisis that is, again, two years closer than it was when Chairman Ryan first proposed his budget.
Eventually, math will be more powerful than political reality. Until then, it’s clear the Beltway crowd is intent on prioritizing petty politics over actual solutions to the fiscal crisis heading our way.