From Jim Gilliam's blog archives
GOP plan: Cut taxes, then spend, spend, spend

November 26, 2003 11:07 AM

LA Times: Republicans co-opt the Great Society:

It is the health-care equivalent of President Nixon's going to China: The biggest expansion of Medicare since its inception has been approved on the watch of a Republican Congress and a Republican president.

This implausible product from the party of limited government is the culmination of years of snowballing pressure on Congress to provide drug coverage to senior citizens, who often face crippling pharmaceutical bills.

The party that called for major reductions in the growth of Medicare in the mid-1990s under House Speaker Newt Gingrich of Georgia is now eagerly embracing the addition, at a cost of nearly $400 billion over 10 years, of prescription drug coverage to the program that was a cornerstone of President Lyndon B. Johnson's Great Society.

The bill makes good on myriad campaign promises made by GOP candidates over the last five years — including President Bush, who now heads into his 2004 reelection campaign claiming credit for breaking a years-long deadlock over prescription drug coverage.

It marks the end of a long chapter in the 38-year history of Medicare, in which the growing clamor for drug coverage topped the charts of voters' domestic policy concerns, dominated health debates in Congress and became a fixture of political campaigns.

But it is not the end of the book on Medicare: The bill, an amalgam of federal and private-sector approaches to providing drug benefits, includes a groundbreaking, but limited, experiment in introducing more market competition to the program's basic services.

The question of which approach will dominate Medicare in the long run may hinge on which party prevails in the next few elections.

"If Democrats win, they will build on the drug benefit, trying to make it more generous, and ignore — if not pare back — the pro-competition provisions," said Drew Altman, president of the Henry J. Kaiser Family Foundation. "If Republicans win, they will build on the private market mechanisms."

The drug coverage issue has been part of a much broader debate over the years about how to modernize Medicare and prepare for the retirement of the baby boomers — those born between 1946 and 1964.

Drugs have become enormously more important since Medicare was established in 1965. The most common and costly medicines that are now central to treating older Americans — such as Lipitor, a widely used anti-cholesterol drug — were not even a gleam in a scientist's eye when the program was being hatched.

Drug coverage was added to Medicare once before, in 1988, when it was part of a package that also provided new protection against catastrophically high health-care costs. But that bill was repealed a year later in the face of a revolt by senior citizens, who realized that they alone would have to pay for the new benefits through steep new fees and premiums.

That made politicians wary of the issue, but political pressure to add a drug benefit grew along with drug prices and use. After President Clinton's 1993 health plan went down in partisan flames, Republicans began to take a more active interest in formulating conservative approaches to health-care policy.

"Historically we thought of health as a liberal Democratic issue," Gingrich said in an interview. "We concluded [in the 1990s] that this was the central reform requirement of the next generation."

After Republicans took control of the House and the Senate in 1995, Gingrich's drive to balance the budget called for significant reductions in the growth of Medicare. He championed ideas to introduce more free-market competition and consumer choice. Clinton kept such changes from being enacted, and Democrats ran thousands of political ads against Gingrich in the 1996 campaign.

Rep. J. Dennis Hastert (R-Ill.), who succeeded Gingrich as House speaker in 1999, sensed the political power of the prescription drug issue. Far from fighting the idea as an expansion of government power, Hastert developed a Republican plan and passed it through the House in 2000. It died in the Senate.

When a huge federal budget surplus materialized in 2000 and 2001, the costly drug benefit suddenly seemed more affordable.

"What really unlocked this and created a bidding war was the existence of the surplus," said Jonathan Oberlander, a professor at the University of North Carolina. "Once it got out of the Pandora's box, it was hard to leave behind" — even when the surplus vanished.

Late in the 2000 election campaign, Bush, under fire on health issues, said he would push for a Medicare drug benefit. That became a key part of his agenda of "compassionate conservatism."
Congress considered prescription drugs again in 2002, but the bill died in the Senate, which was then back in Democratic hands. Some Republican political strategists concluded that the issue was a key factor in the Democrats' loss of control of the Senate in 2002.

So with Republicans in charge in both Congress and the White House this year, Bush and GOP leaders concluded that failing to deliver a prescription drug benefit was not an option, even though the budget surplus had vanished. To bring along the conservative wing of his party, Bush linked the drug benefit to shifting some Medicare beneficiaries into private health plans and increasing market competition between Medicare and managed care.

Although the final version did not go far enough in that direction to satisfy some conservatives, it was too much for many Democrats — who were put in the unlikely position of opposing expansion of a program they had owned politically.

Republicans "took a Democratic idea and tried to use it as the engine to dismantle Medicare," said Sen. Barbara Boxer (D-Calif.).

More from the archive in Legislation, Politics.

GOP plan: Cut taxes, then spend, spend, spend (11.26.2003)

Next Entry: Uncovered screening Dec. 3rd (12.02.2003)
Previous Entry: Can Anyone Catch Dean? (11.22.2003)

Read the 8 comments.


When a huge federal budget surplus materialized in 2000 and 2001, the costly drug benefit suddenly seemed more affordable.

When anyone states there was a "Budget Surplus" they automatic reduce themselves to idiot status, there was NEVER a budget surplus, federal borrowing limits have increased every year I have been alive. The "Budget Surplus" was a myth that has not yet died, even wilder then the claims of "Elvis Lives" and the plots of an Oliver Stone movie.

As for the current medicare expansion, anyone that believes it is going to cost only 400 BILLION dollars has not been paying very close attention to previous government cost estimates. Until congress (and the president) make it at least a need based program instead of an age based program my generation and younger is screwed.

Mon Dec 1 2003 3:00 PM

Paul in OC:

"federal borrowing limits have increased every year I have been alive"

Were you alive in the years 1997 - 2001, when the debt limit was a constant $5.95 trillion?

Tue Dec 2 2003 8:01 AM


Paul in OC:

I don't know where you dug up that web site from, looked like something from Sesame Street. Go to the government's own site and look it up for yourself.

National Debt for Fiscal Years ending:

09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/28/2001 5,807,463,412,200.06
09/29/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,633.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34

Looking for more historical information? Visit the Debt Historical Information archives.

Closest the US came to a BALANCED BUDGET was in FY 2000, national debt increased by ONLY 17 TRILLION dollars. Close but no cigar.

From 1997 to 2001 I was alive and paying taxes like a good little citizen.

Tue Dec 2 2003 11:36 AM

Paul in OC:

You said "federal borrowing limit", and that has a specific meaning, and it is not equal to the total debt. The federal debt (or borrowing) limit fell annually for four consecutive years, so your statement to the contrary was false.

"...national debt increased by ONLY 17 TRILLION dollars"

Another incorrect statement, as a cursory look at your numbers will quickly reveal. (thousands, millions, billions... hmmm... )

The total debt is increasing, because they are balancing the books on the back of social security. I agree with you that that is a very bad idea, but Bush used the fake surplus as a justification to cut taxes. I'm heartened that you are willing to admit that Bush lied about the surplus, just as he has lied about so many other things.

Tue Dec 2 2003 3:22 PM


Actually the media, Bush, Clinton, Gore, and about everyone in congress has lied about the supposed surplus, or are to stupid to realize they are repeating a lie. Ignorance might be a bliss but it is not an excuse.

As for the description of debt, money owed is debt, whether it is borrowed from a trust or an individual. If I used my employee's 401K to pay my salary I would go to prison, apparently the government operates on differant rules.

Excuse me on the error - it is 17 Billion. Glad to see you read my posts so carefully.

Bush didn't use the surplus as a reason to cut taxes - he used the need for economic stimulus due to the recession as the reason the tax cuts.

I agree that the idea of increasing the size of goverment without the means to fund it is a terrible plan. It is because of this I say that Bush is extremely vulnerable to be kicked out of office, but at this point I haven't seen a democrat canidate that has more to say then "I hate Bush, and you should too". Is there a democrat running for president that has announced plans to reverse this trend of increasing the size of goverment?

Thu Dec 4 2003 9:25 AM

Paul in OC:

I agree with you on the debt. Despite the economic downturn, I'm certain that if Clinton were allowed to remain in office, we would have a true surplus by now (and probably another impeachment trial as well).

Bush used many excuses to cut taxes, but the first one was that we were running a surplus, and "it's your money". When the "surplus" evaporated, Bush said that the economy needed a stimulus. The reasons change, but the policy remains the same. This indicates that the reasons are just the sugar-coating for whatever pill we are meant to take. Like it or not, we are taking that pill!

Dean is a fiscal conservative. It's safe to say that balancing the budget would be one of his top 3 priorities. He will also attempt to repeal the Bush tax cuts, insofar as they are the chief reason why the federal debt is spiralling out of control. Other than this, it's unlikely that Dean would raise personal income taxes. It's fairly likely he would attempt to close loopholes in corporate income tax collection.

I would feel better about the Bush tax cuts, if Bush was able to cut spending, but it turns out that Republicans are actually bigger porkers than are Democrats. Hard to believe, if I hadn't seen it with my own eyes. It's kind of like the ending of "Animal Farm", by George Orwell, where the pigs morph into humans. As soon as the Republicans controlled the government, their small government rallying cry was extinguished.

They're the new pigs on the block.

Thu Dec 4 2003 11:26 AM


From what I have heard Dean is proposing a national health care - plan details to be released only under torture or election to president. How is this huge expansion of government going to curb spending? I will admit I am very uninformed about what the rest of his candidacy stands for other then the afore mentioned "I HATE BUSH, YOU SHOULD TOO" platform. If he has a economic plan please release it and debate it - tired of hearing a rich doctor piss and moan about how the rich should piss an moan.

I beleive the tax cuts will eventually result in MORE taxes with increased inconomic activity - even JFK proved that. But they will never be enough to cover the current expensions.

"I would feel better about the Bush tax cuts, if Bush was able to cut spending, but -"

You had me until the BUT part, BOTH parties are feeding at the federal hog trough like there is no tomorrow and at this rate there won't be.

Fri Dec 5 2003 9:21 AM

Paul in OC:

It's OK to cut taxes if you cut spending as well. Cutting taxes without reducing spending is like playing chicken with financial ruin. Counting on an economic recovery to raise revenues doesn't do anything about the trillions which will be added to the national debt in the meantime.

I have a real problem with 1/3 of my tax money going to finance prior spending. In essence, I'm still paying for the Reagan years, and I resent it a great deal.

Now, the next generation gets to pay for not only the Reagan years, but the Bush years. How is it that Clinton was able to drive the economy forward and balance the budget at the same time? Why can't a Republican do that?

Fri Dec 5 2003 11:31 AM

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