The Militant(logo) 
    Vol.61/No.28           August 25, 1997 
Bipartisan Budget Attacks Entitlements  

President William Clinton and his Democratic and Republican colleagues reached a "balanced budget agreement" July 28 that gives significant tax breaks for the wealthy while continuing to chop away at the living standards of working people.

The deal, lauded in the bourgeois media as the "first major tax cut since 1981," increases inheritance tax exemptions from $600,000 to $1 million after 10 years and reduces the capital gains tax on profits from the sale of investments from 28 percent to 20 percent.

The pact slashes $115 billion from Medicare and $13 billion from Medicaid over the next five years. The budget would cut payments to hospitals, doctors, and other health care facilities. Medicare recipients will be required to pay $4.50 more in monthly premiums by 2002; current payment are $43.80 per month for all Medicare beneficiaries. Some 38 million people who are elderly or disabled receive Medicare benefits. Medicaid provides means-tested medical coverage to low-income workers.

Hospital administrators say the reductions in these programs will lead to layoffs and cuts in medical services. The proposed bill contains two new options that weaken Medicare as an entitlement. One would allow individuals to drop out of the standard Medicare program if they can afford to pay extra fees for private contracts with physicians for medical service at higher prices. The other option permits individuals to enroll in programs with no limits on premium charges by paying the amount over what Medicare will cover. Currently, doctors can be prosecuted if they charge Medicare recipients more than the amounts allowed by the government - even if patients can pay more.

During the course of the budget negotiations, capitalist politicians and the big-business media floated a proposal for means-testing Medicare benefits by imposing higher payments for wealthy beneficiaries. The Senate voted June 24 to raise the Medicare eligibility age from 65 to 67, increase monthly payments, and impose a $5 fee for each home care visit. The means-testing plan was shelved, however, after the House of Representatives voted July 10 against increasing the eligibility age.

"In principle, I support means-testing" of Medicare, said Clinton, suggesting some such arrangement could be worked out in the future. In a July 2 Wall Street Journal column, Gerald Seib praised the budget negotiations as "forc[ing] everybody to deal with [Medicare] head-on... This is how transformations happen. Important changes are often years in the making and involve countless charges up the political hill."

Meanwhile, as part of a much-touted health-care program for children, the bipartisan budget deal deepens the capitalist rulers' attack on women's access to abortion. It would codify into law a ban on state governments using federal funds to "pay for any abortion or to assist in the purchase, in whole or in part, of health benefit coverage that includes coverage of abortion."

The plan allocates $24 billion that state governments are supposed to use to provide health care for uninsured children over the next five years. This can include buying private insurance and charge small premiums, deductibles, and other fees to working-class families whose children receive coverage under the program. Clinton initially claimed that up to 5 million children would receive medical insurance from the budget deal, but congressional estimates put the figure at about 500,000. There are an estimated 10 million youth who lack health coverage in the United States.

The framework for the budget pact was established on May 2 when Clinton and his congressional cohorts reached a consensus on their bipartisan assault on social entitlements. Republican Speaker Newton Gingrich claimed the accord was the completion of his so-called Contract with America.

At the same time Clinton used the deal to burnish his image of "fixing" the welfare law he signed last year, which among other things eliminated the Aid for Families with Dependent Children, a component of the Social Security Act of 1935. The budget restores benefits to 500,000 disabled immigrants with legal documents who were among the 1 million immigrants scheduled to be kicked off the food stamp program.

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