In his State of the Union address on Wednesday, President Bush laid out his most detailed case yet for restructuring Social Security, a system he said is headed toward bankruptcy.

But the president's sense of urgency has puzzled many members of Congress, advocacy groups and scholars, who note that other safety net programs for older Americans face far larger and more urgent financial problems -- especially Medicare, Medicaid and, to a lesser extent, the quasi-governmental corporation that insures private pensions.

The main reason the president is so focused on Social Security appears to be philosophical. His proposal to create personal Social Security investment accounts is the centerpiece of his sweeping effort to create an "ownership society."

"We want more people owning their own home. We want people owning their own business," Bush told voters in Montana last week as he began a five-state tour to sell his Social Security proposals. "And I think it makes sense to have people owning and managing their own retirement account."

Political motives are ascribed to the effort, as well, such as the desire to breed more Republicans by creating more investors and to erode the idea that Social Security is a Democratic program. But there's also the practical political consideration that, as tough as it might be to restructure Social Security, tackling the towering financial problems faced by Medicare and Medicaid might be tougher still.

On Wednesday night, President Bush cited figures from the 2004 report of the Social Security trustees and demanded that Congress act now to fix what he described as a broken retirement system. But in a summary of that same report and an accompanying report 2004 report on Medicare, the trustees specifically warned that "Medicare's financial difficulties come sooner -- and are much more severe -- than those confronting Social Security."

Social Security is currently the federal government's largest program, paying benefits to more than 47 million people. But the cost of Medicare, which provides health care coverage to more than 40 million aged and disabled Americans, is expected to soar past that of Social Security by 2024. The price tag for Medicaid, the joint federal-state program that finances health care for the nation's poor, grew by a third between 2000 and 2003 and also is expected to grow far faster than Social Security in the future.

During a congressional hearing on Social Security last week, the director of the Congressional Budget Office, Douglas Holtz Eakin, warned that Medicare and Medicaid combined "could rise to be as large as the entire federal government in the next 50 years."

So why is President Bush making Social Security so much more of a priority?

Many Democrats suspect the Bush administration's main aim is to begin the dismantling of Social Security, their party's signature achievement in social policy.

"Medicaid expenses in almost every state exceed that state's expenditure on public education: that is a crisis," said Democratic Sen. Richard J. Durbin of Illinois, the assistant minority leader. "Medicare has a life expectancy as a program of only about 15 years. So if you want to talk about real crises that the White House should be addressing, you'd start with those two programs."

Pennsylvania Sen. Rick Santorum, a Republican who has specialized in aging issues, cited practical politics as the main reason Bush is giving priority to Social Security. The very fact that Social Security's problems are long term makes fixes easier, he said, while repairing Medicare and Medicaid will require painful cutbacks or tax increases in the short term.

"It's hard to see how we can create solvency for Medicare without doing benefit reductions, squeezing providers to where they may not even provide Medicare services anymore, or increasing taxes to pay for it," Santorum said. "Social Security in my mind is the easier one to strengthen, and so I think it's appropriate that you take it first.... The other ones are much more difficult to tackle and require a heck of a lot more of a lift."

Robert E. Moffit, the Director of the Center for Health Policy at the conservative Heritage Foundation who has studied Medicare extensively, offered another perspective.

"Congress is in a state of denial about Medicare," said Moffit. "They are going to try desperately to ignore it."

White House spokesman Jim Morrell noted that changing Social Security has been a long-standing goal of the president, which he laid out more than four years ago during the 2000 campaign.

Morrell also pointed out that the Medicare law Bush signed last year that created an expensive new prescription drug benefit included some measures to control costs, such as making sure every enrollee can get an annual physical to catch health problems earlier.

"At the same time," Morrell said, "we do recognize that there is more to do to help control the cost of Medicare and that is something we will continue to assess moving forward.

"With regard to Social Security, there's really nothing that's been done recently to help address the issues facing that program, which is why the president believes it is vitally important that we move forward this year."

A look at the numbers

In their most recent report, the trustees predicted that the cost of Social Security would rise significantly between 2010 and 2030 as the baby-boom generation retires -- a seismic demographic shift that also will dramatically affect the Medicare program...

Medicare will be hit with a double whammy -- a flood of boomers will become eligible for benefits at a time of skyrocketing health care costs. Medicare's key trust fund -- the one that draws on current payroll taxes to cover inpatient hospital care -- will be tapped out in 2019, nearly a quarter century before the Social Security fund.

The Government Accountability Office predicts that Medicare expenses will exceed those of Social Security by 2024 and rise to double those of Social Security by 2078. The cost of the president's new Medicare prescription drug benefit alone over 75 years will be $8.1 trillion, more than twice the debt that Social Security will incur over the same period.

The long-term projections for Medicare are simply staggering.

Assuming current laws and trends, in 73 years Medicare will represent nearly 14 percent of the U.S. gross domestic product; Social Security will represent 6.6 percent. In that light, consider that over the past 50 years the total amount coming into the Treasury each year from the federal income tax averaged 11 percent of GDP.

Rising health care costs are similarly drowning the Medicaid program, the federal-state program that provides care for 53 million low-income Americans of all ages. Between 2000 and 2003 as the economy faltered, the program had to provide coverage for reams of new clients who otherwise would have been uninsured.

Medicaid expenses are currently eating up 20 percent of state budgets, setting off screams from the nation's governors. If nothing is done, within 10 years that figure is expected to rise to 40 percent.

As a result, Medicaid also is expected to be targeted for cuts when President Bush delivers his budget to Congress this week. One clue came last week, when Health and Human Services Secretary Mike Leavitt proposed scaling back access to nursing home care and reducing drug repayments to pharmacies, measures he said could reduce the program's budget by nearly $60 billion over the next decade.Governors have vowed to fight any federal cutbacks, fearing a shift of even more costs onto their budgets. In a recent appeal to stave off reductions in federal Medicaid support, Republican Gov. Mike Huckabee of Arkansas said that "to balance the federal budget off the backs of the poorest people in the country is simply unacceptable. You don't pull feeding tubes from people," Huckabee said. "You don't pull the wheelchair out from under the child with muscular dystrophy."

...significant restructuring of Medicare and Medicaid don't appear to be on the agenda of either the Congress or the president.

By Maeve Reston, Pittsburgh Post Gazette, Feb 6, 2005

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