Tricked By Clinton

James K. Glassman | January 26, 1999

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Beyond the core package, insurance companies could offer more benefits, each with its own configuration of co-payments and deductibles. And "premium support" would offer extra help for low-income Americans, says Thomas.

But the main point, Breaux told me, is that "questions of price would be decided not by micro-managing out of Washington, but by the marketplace." He added, "The concept of premium support is gaining momentum." But that was before Clinton decided, in Thomas's words to "throw a $700 billion party for Medicare."

When politicians began, with admirable seriousness, to confront the crisis facing the nation's two major entitlements, it was clear there were only three solutions: cut benefits, raise taxes or move toward market reforms.

To stave off those reforms and to avoid the political fallout from cutting benefits, Clinton has, in effect, decided to raise taxes. But the trick is that he's not touching payroll taxes. Instead, he's using income taxes, which should, by right, be returned to the people who are being overcharged.

But preventing a tax cut is one thing. Preventing reform of Social Security and Medicare is worse. It's a shame, but this genius at sleight of hand may have pulled off yet another trick.