VIEW FROM WASHINGTON / ROBERT A. ROSENBLATT : Sen. Kerry Doesn't Think Entitlements Are Necessarily a Benefit

ROBERT A. ROSENBLATT writes about banking, health care and other national issues from The Times' Washington bureau

Sen. Bob Kerrey, a maverick Democrat from Nebraska, wants a fearful Congress to touch "the third rail of politics"--the vastly popular entitlement programs, such as Social Security and Medicare, that account for an ever larger share of federal spending.

Kerrey is a thorn in the side for President Clinton and the Democratic Establishment. As the price for his vote last year backing the Clinton budget, he extracted the creation of a commission on entitlement reform. And he's stubborn enough to insist that the commission, which he chairs with Sen. John Danforth (R-Mo.), won't give birth to one of those impressively thick, but unread, reports so often stacked on Washington office shelves.

Instead, he hopes to persuade an always nervous Congress and an even more anxious group, the millions of Americans who collect benefits, that they must make some sacrifices. This could mean such controversial steps as giving up part of the annual cost-of-living raises in benefit checks or linking Medicare premiums to a person's income--and then making the affluent elderly pay a lot more than the current $41.10 a month paid by everyone.

"I've got to persuade people who are beneficiaries that the No. 1 issue is that the economy isn't growing as fast as it should," says Kerrey, one of the toughest of deficit hawks. He believes fervently that the economy will never return to rapid growth if the huge deficit keeps consuming cash that could be used for private investment.

"If it's just an argument over 'Will you cut my benefits, yes or no?' then I lose that argument," Kerrey admits. "I lose unless I make this a successful patriotic appeal."

He's fighting against big odds.

In President Clinton's first budget year, federal spending grew automatically by $48 billion, fueled by the big four of entitlements: Medicare, $17 billion; Social Security, $17 billion; Medicaid, $11 billion, and pensions for the government's civilian and military retirees--$3 billion.

For next year, spending will grow $50 billion more, without benefit of action by the President or Congress. Entitlement means just that--if you are eligible for the program, you get the money, and the rolls of recipients grow inexorably every year.

At the Washington headquarters of the American Assn. of Retired Persons--with more than 30 million members the King Kong of the elderly lobby--they regard Kerrey as a man dangerously obsessed with a single issue and offering a wrong-headed solution.

"The federal deficit is only one factor in this country's economic problem," says John Rother, director of public policy. "The runaway costs of health care, the problems of the education system and other things affecting productivity are more important than the deficit."

AARP says Kerrey's single-minded focus on the deficit blinds him to larger realities. Medicare is just part of a bigger problem of runaway health costs that won't be solved until the nation adopts major health care reform. And the Social Security payroll tax is in temporary surplus, generating $60 billion more in revenues this year than the government pays out in benefits to retirees, survivors and disabled persons, Rother notes. "You can hardly say that's the problem driving the deficit," he contends.

The two sides are in stark, irreconcilable dispute.

The 50-year-old Kerrey believes that Social Security will be there for him at retirement, but he worries about the taxes his children, 19-year-old Ben and 17-year-old Lindsey, will have to pay in the next century to keep their dad's benefit checks flowing.

AARP says not to worry. Fix the health care system and Medicare will fix itself. There's plenty of time to make some minor changes in Social Security to assure that the fund doesn't reach the bankruptcy predicted by the trustees for the year 2029.

The whole purpose of Kerrey and Danforth's entitlements commission is to attack the AARP point of view and press for major changes in Social Security and Medicare. Kerrey says his Democratic congressional colleagues tell him--privately--that nothing is too sacred for debate, that "everything is on the table."

But the Democrats have feasted in almost every election on Medicare and Social Security, proclaiming themselves the party of compassion that will safeguard benefits for the elderly, the ill and the retired.

Bob Kerrey has a different idea. "Neither party is going to win if the United States economy doesn't grow," he says. Democrats "are discovering today we can win on crime and we can win on welfare," says the former Nebraska governor, a Medal of Honor recipient in Vietnam.

It's a topsy-turvy world where the Cold War ends, the Berlin Wall comes down and the Israelis and Palestinians make peace. So maybe something really strange can happen--like a Democratic senator leading a tough national debate over the future of Medicare and Social Security.

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