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Former Bush Adviser Hubbard Calls Medicare Expansion 'Unwise'
The Wall Street Journal
November 29, 2005
R. Glenn Hubbard, former chairman of President Bush's Council of Economic Advisers, says the Bush-backed expansion of Medicare to include prescription drugs was
"unwise." "The Medicare expansion without substantial reform of the system was unwise fiscal policy," Mr. Hubbard, now dean of Columbia University's business school, said in an online exchange sponsored by The Wall Street
Journal.
"The current Social Security and Medicare systems are on an unsustainable path," Mr. Hubbard said in the exchange with Robert Reich, a Brandeis University professor who served as secretary of labor in the Clinton administration. "In both cases, sound fiscal reform should involve slower benefit growth for high-income households. In addition, fiscal reform for Medicare must be accompanied by reform of health-care
markets.
"In the exchange on fiscal policy, Mr. Reich criticized the Bush administration for proposing to make Mr. Bush's tax cuts permanent in light of new federal spending commitments. "Much of its new spending -- especially on national defense, homeland security, and Medicare prescription drugs, will go on for years. The drug benefit is a new entitlement. This isn't sustainable over the long haul and I don't think it's sustainable even over the next five years," he
said.
Mr. Hubbard was chairman of the U.S. Council of Economic Advisers from February 2001 until March 2003, where he advised President Bush on economic, tax and budget policy, international finance and health care, among other
issues.
Enrollment for the Medicare prescription drug benefit began earlier this month and continues until May 15, 2006. The program itself begins Jan. 1. To participate, people must enroll in a private plan that will cover a portion of their prescription drug costs. Critics have described the program as much too complex, and recent surveys found potential beneficiaries wary.
Conservatives sympathetic to President Bush's agenda have complained that the legislation enlarged the federal government. Liberals have complained, among other things, that the legislation prevents the government from bargaining with drug companies to lower prices.
The rising cost of Medicare, both because of rising health care prices, a proliferation of new health technology and a growing number of elderly, is one of the major long-term fiscal issues facing the U.S. government.
Mr. Bush isn't expected to tackle government health-care spending in his upcoming budget, and his proposal to revamp Social Security is largely stalled. One option the White House is considering for next year is proposing a revenue-neutral overhaul of the tax code to increase economic growth and provide better incentives for private savings and investment.
Congress, meanwhile, is struggling to finish work on a modest deficit-reduction bill and the extension of tax cuts passed earlier in Mr. Bush's term that, without congressional action, would expire later this decade.
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