Ticking Time Bomb of Debt

Everett Dirksen gets credit for the quip about government spending, “A billion here, a billion there, pretty soon you’re talking about real money.” If only the late, legendary Illinois senator and longtime minority leader could see Congress now that it’s poised to pass a Medicare prescription drug benefit.

The measure, which President Bush staunchly backs, is a time bomb for the federal budget deficit. “The U.S. budget,” investment house Goldman, Sachs & Co. stated Friday in its newsletter, “is out of control.” With a deficit of $500 billion looming for 2004, neither the country’s seniors nor anyone else can afford adding to the debt that chokes off economic growth and suppresses job creation.

At least taxpayers got a reprieve on the $33-billion energy bill, which GOP leaders conceded Monday would not pass this year. It had dozens of outrageous pork provisions, including a $2-billion bailout for operators of older, coal-burning plants, as well as $23 billion in tax breaks, mostly for fossil fuel producers. “Sunset” provisions -- phony expiration dates -- on some of the tax cuts meant that the bill’s cost probably would have been double what Congress assumed.

But if this bill was a budget misdemeanor, then overhauling Medicare, at $400 billion, is a fiscal felony. The Congressional Budget Office says the Medicare changes would cost $40.2 billion in 2007 but would zoom to $65.2 billion by 2013.

Though the bill is a bonanza for the health-care industry and employers -- at least $125 billion is directed toward them in the next 10 years -- it’s far from clear that the cost is justified. Seniors must look closely to see how this “reform” affects them. And just how will we pay for Medicare when its beneficiaries number some 77 million by 2013?

Though a billion here and there may not seem like much, the skyrocketing budget deficit has a direct effect on business investment. The higher the deficit, the more the Federal Reserve must raise interest rates to avoid inflation and to attract investors so the government can pay its debt. Low deficits in the 1990s let Fed Chairman Alan Greenspan hold down interest rates. But Congress’ return to its free-spending ways prompted him a few weeks ago to warn of “destabilizing effects” as baby boomers tap their Medicare and Social Security benefits.

Unfortunately, the presidential campaign season already seems to be in full swing, and Bush, who in January urged Congress to “control spending,” has gotten feckless about giant deficit spending. With the staggering expense of the Iraq occupation and the war on terrorism hanging over them, it’s hardly the time for the president and Congress to play budget roulette. The remarkable generation that endured wars, the Depression and other privations wouldn’t want seniors’ needs to bankrupt the nation’s future. But political shortsightedness combined with a reckless stewardship by Congress and this adminstration, is doing just that, and responsible voices must speak up, fast, to stop this fiscal train wreck.