MEDICARE AND ENTITLEMENTS

The Bush administration's Medicare reform proposals, like previous attempts at entitlement reform, have been proclaimed dead on arrival by Congress. The news comes amid details on the precarious financial situation of the trust funds that finance Medicare expenditures:

• The Medicare trustees warn that Medicare faces collective unfunded obligations of more than $74 trillion -- more than six times the current size of the American economy.
• The Government Accountability Office estimates that for each year that Medicare and Social Security entitlements go unreformed, their projected shortfall grows by an additional $2 trillion.
• The Medicare Part A trust fund is scheduled to be "exhausted" -- in plain English, flat broke -- in 2019.

The president's budget constituted a good first step toward Medicare reform, proposing to slow the growth of Medicare by nearly $178 billion over the next five years. In addition, medical liability reform would reduce providers' costs associated with legal claims, saving money for Medicare and the general public.

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