Make-Believe Government

Lately, Chatterbox finds himself turning to the business page of his newspaper before he reads the “A” section, a reversal of lifelong habit. The business news (apart from the story of “fugitive financier” Martin Frankel) hasn’t been especially interesting lately, but it does seem that the general topic of money is what life is all about now. What is George W. Bush, after all, but a large pile of money ($36.25 million raised this year, according to today’s Washington Post) currently jetting around California in search of even more money?

There is so much money flying around the economy that the principal concern of the White House–indeed, now that the post-Littleton gun-control frenzy is over, perhaps its only concern–is making sure there will be enough money 30 years from now to run the government. President Clinton’s Medicare plan promises to achieve this by squeezing doctors, adding co-payments, etc., etc. But the real news in the plan is the introduction of a long-overdue Medicare benefit to cover drug costs. This will be paid for, Clinton says, by a surging economy, estimates of whose growth were recently revised upward. “We actually projected yesterday that for the next 15 years, the surplus will be $1 trillion more than we thought it was just six months ago,” Clinton said in his June 30 Medicare speech. In 15 years, Clinton said, the United States will be out of debt “for the first time since 1835.”

But what if the growth estimates turn out to be … wrong, as long-term estimates nearly always do? One way to guard against that would be to shift more of the Medicare program’s expanded costs onto its wealthier beneficiaries. The White House apparently made a feint in this direction and then yielded to opposition from congressional Democrats. (Congress has never quite gotten over the geezer fury visited on it when it applied, then quickly repealed, a sliding premium to expanded Medicare coverage in the late 1980s.) It’s possible Clinton’s waiting for the Republicans to propose it, so he can perform the same “don’t throw me in that briar patch” trick that he perfected when negotiating with Congress over welfare reform in 1996. But more likely the Republicans will care more about slashing taxes. OK, so why not wait for the bad times to come and then shift more Medicare costs onto wealthier beneficiaries? Because however difficult that is to do now, it will be 10 times harder to do during a recession. In that sense, Clinton’s amazingly responsible bridge-building to the 21st century isn’t responsible at all. But amid all the financial delirium, Chatterbox finds he cares about this only a little bit. And now you’ll have to excuse me while I check out what James Surowiecki’s got to say about yesterday’s Fed’s interest rate hike in “Moneybox,” the only Slate column that’s worth a damn …