Astronomy teaches that a star will, in its death throes, greatly expand itself in a vain attempt at survival before finally collapsing of its own weight and destroying itself. For some reason, that process seems to be popular in Congress as entitlement reform. The latest trial balloon floated out of the Senate on a potential compromise for ObamaCare would vastly expand the entitlement program heading most quickly towards insolvency:
Senate negotiators moved decisively away from including a government-run health insurance plan that would start on Day One in any final compromise, a major disappointment for the Democratic base but one that is likely to prove necessary to win over fiscally moderate senators.
Instead, Democrats are considering including a “trigger” that would allow a public plan to kick in – but only in the event that private insurers didn’t step up and offer policies for the new national health insurance plan, which seemed unlikely.
To win over liberals disappointed at losing the public option, Democrats would allow older Americans starting at age 55 to buy into Medicare, the popular program for the aged. The Medicare expansion would be a significant victory for Democrats, who spent years pushing for it. The proposal would in effect create a public health insurance option for older Americans, since Medicare is government-funded and government-run.
If the Senate reaches a compromise based on these principles, it would set up a major clash with the House, which included a pure public option in a bill passed last month. Some House progressives, like Rep. Raul Grijalva (D-Ariz.), have been critical of the Senate’s national plan idea, calling it “a “whitewash” and “not even reminiscent” of the public option.
That isn’t close to the worst part of this idea. For years, we have been warned about the demographic bomb of Baby Boomers hitting retirement age in terms of Medicare and Social Security solvency, especially the former. We have over $40 trillion dollars in unfunded liabilities already in this program, which the government doesn’t count because the benefits aren’t all due this year. However, unless all Americans suddenly start dropping dead at 62 years of age, Medicare expenses will increase dramatically due to the aging population and its longer life spans.
A rational approach to this problem would have been to means-test some of its qualifications, or to raise the retirement age in order to keep enrollments down and costs at a manageable level. Such an approach would have created a vacuum that the private sector could have filled, creating jobs and a bigger tax base.
Instead, Harry Reid and the Senate plan a hair-of-the-dog approach to the entitlement hangover. Instead of finding a way to control enrollments, the Senate will propose a massive expansion of enrollment instead. That will mean more Americans will be in the Medicare system for even longer than previously considered. What does that do to the demographic bomb? It will accelerate its arrival and deepen its impact, leaving us with far greater liabilities in the future than anyone predicted.
Call it the Supernova Option. At the end, it will leave a black hole, sucking cash out of the nation with no way to stop it.