Rep. Wolf Says Entitlement Programs Could Affect U.S. Bond Rating
Rep. Frank Wolf (R-Va.) on Friday in a letter to President Obama said that the U.S. could lose its triple-A bond rating if Congress does not act quickly to overhaul U.S. entitlement programs, including Medicare and Medicaid, and reduce federal debt, the AP/Detroit News reports.
Several lawmakers in Congress over the past two years have introduced bills to create a bipartisan task force to address the growing costs and potential insolvency of entitlement programs, such as Medicare and Medicaid. Wolf is a co-author of one such bill (HR 1557). A federal report issued earlier this month found that the trust fund Medicare uses to pay for beneficiaries' hospital care will be insolvent by 2017, two years earlier than previously predicted.
According to the legislation, the task force would be responsible for developing a "grand bargain" package of recommendations to Congress on tax increases and benefits related to the entitlement programs. However, the task force has been opposed by House Speaker Nancy Pelosi (D-Calif.), several top congressional committee leaders and White House aides who said that other priorities, such as a health care system overhaul, need to be addressed first.
Wolf said, "The fact that the leadership has been opposed to it has been a problem," adding, "There's an economic tsunami off the coast and it's ready to wipe us out." David Walker, president of the Peter G. Peterson Foundation, said that currently the potential for the task force is not good but that it should improve as the economy recovers and Congress can offer more attention to the plan (Raum, AP/Detroit News, 5/24).
- Dan Thomasson, Contra Costa Times: Although it is "fine" that Obama likely will create a task force to address entitlement reform, such committees' recommendations often "end up abandoned in favor of the quick fixes" because lawmakers "find their recommendations too strong medicine," Times columnist Thomasson writes. He continues that "[o]ne can only hope" that "the latest dire predictions jolt the president into action earlier than he wanted." However, Thomasson notes that "the betting is that it won't be all that soon." He concludes, "Health care is [Obama's] initial signature initiative as it was with the Clinton administration," adding, "Meanwhile, the real national domestic problem, how to rebalance the giant entitlement programs, will go unattended" (Thomasson, Contra Costa Times, 5/23).
- Robert Samuelson, Washington Post: "It's increasingly obvious that Congress and the president (regardless of the party in power) will deal with the political stink bomb of an aging society only if forced," Post columnist Samuelson writes. He continues, "And the most plausible means of compulsion would be for" entitlement programs like Medicare "to go bankrupt: Trust funds run dry; promised benefits exceed dedicated payroll taxes. The sooner this happens, the better." According to Samuelson, Obama "has yet to signal even general support for needed policies: gradual increases in eligibility ages; gradual benefit reductions for wealthier retirees; a fundamental overhaul of Medicare." He writes that similar to the auto industry, "we continue bad habits because we can -- temporarily," adding, "Procrastination is a bad policy. The longer changes are postponed, the more wrenching they will be." Samuelson concludes, "The hurt for retirees and taxpayers will only grow with time," adding, "The lesson: A 'crisis' is just what we need" (Samuelson, Washington Post, 5/24).