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Gramm crusades for a Medicare cure

Sen. Phil Gramm of Texas ran a poor race for the Republican presidential nomination last year and disappeared from the contest before most voters heard him or his message. What Gramm is saying these days makes you wish he had the kind of bully pulpit that only the White House provides.

Gramm has developed a chart talk that does for Medicare what another Texan, Ross Perot, did for the budget deficit with his 1992 presidential campaign infomercials: Make the problem clear. The difference is that Perot had a huge national audience, while Gramm has to do his flip charts repeatedly to reach even 1,000 people.

Once you have seen them, however, you understand how dishonest and dishonorable it would be for the scaredy-cat politicians in the White House and on Capitol Hill to walk away from the Medicare crisis with only a temporary fix that would leave the underlying structural problems unrepaired.

The first of Gramm's charts shows that the problems go back to the very creation of Medicare in 1965. That year of President Lyndon Johnson's Great Society program was significant in two other ways. Just before the Vietnam buildup triggered inflation, it marked the end of a period of economic growth that generated a marked rise in real incomes. And it also marked the end of the baby boom that would, as the boomers matured, temporarily swell the number of working Americans whose payroll taxes would pay for their elders' new medical benefits.

In the 1970s and 1980s, real economic growth and the birth rate both slowed down, while the elderly population began to grow. But another Gramm chart shows that we are barely at the edge of the real senior-citizen explosion. This year, the number of Americans over 65 will grow by 200,000. Fifteen years from now, the annual increase will be 1.6-million _ eight times as large.

That is why Gramm says these ought to be the good times for Medicare _ a time to be storing surpluses for the crunch ahead. But in fact, the program costs are so out of control that it is running in the red, and its reserves will be exhausted in four years.

President Clinton's answer is to squeeze $100-billion or a bit more out of the providers _ doctors, hospitals and managed-care companies _ buying a few years of grace but leaving the structural problems unsolved. If that is all that is done this year, Gramm says, this nation will inevitably face "the greatest internal financial crisis" in history, one that will make the savings-and-loan bailout of the 1980s look like a tea party.

Gramm told me that the greatest frustration of his Washington career was not his flop as a presidential contender but his inability to persuade his colleagues in Congress to take early action to head off the savings-and-loan crisis. As a relatively junior legislator, he was stymied by then-House Speaker Jim Wright, D-Texas. Now, as the chairman of the Senate Finance subcommittee that handles Medicare, he may have the clout to get something done.

Gramm can be both partisan and abrasive. But on this issue, says Sen. Ron Wyden, D-Ore., a liberal who shares Gramm's disdain for the quick-fix Medicare palliatives, "Phil is really reaching out to both parties."

Although they differ on important details, Gramm and Wyden agree that salvation lies in redesigning the aging Medicare program to incorporate the features that have begun to produce genuine savings in the private sector. Wyden, whose home city of Portland has been a model in this transition, told me that if the changes are introduced promptly but gradually, "We can provide people with better choices, achieve large savings and protect patients' rights."

But all that is conjectural, because Clinton is not part of this effort. Instead, he has used his unrivaled platform to mislead the public into thinking that painless economies will deal with the problem _ for a while. Incredibly, he also has promised new benefits, notably a phaseout of the co-payments for home care.

When Gramm asked earlier this month what those new benefits would cost over the next decade, the man who runs the Medicare program, Bruce Vladeck, said he had been forbidden by Clinton's Office of Management and Budget to give estimates beyond five years. It took a threat from Gramm to block confirmation of pending presidential appointments to the Department of Health and Human Services to force the administration to come clean. Their figures confirm Gramm's fear that Clinton is disguising an unfunded obligation that would reach $15-billion a year within a decade.

Gramm asks an interesting question: "If President Clinton didn't want to help us solve these problems, why did he run for a second term?"

Washington Post Writers Group

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