WASHINGTON—Earlier today, Alabama Senator Jeff Sessions, Ranking Member of the Senate Budget Committee, and Wisconsin Congressman Paul Ryan, Chairman of the House Budget Committee, sent a letter to President Obama following his Administration’s failure to submit a proposal, as required by law, to address Medicare’s financial insolvency.
Ranking Member Sessions stated: “Faced with an approaching debt crisis, the president’s priority should be to meet his legal and financial obligations as the country’s chief executive. Failing to do so only further undermines economic confidence, worsens the conditions for job creation, and accelerates the bankrupting of Medicare. A big part of the reason we are in this mess is because of Washington’s failure to budget honestly and play by the rules. It’s time for a change. I hope the president will finally meet his legal duty to respond to the Medicare warning. The requirement is critically important because it recognizes that presidential leadership is necessary when Medicare is at risk. The Medicare trustees have sent their warning—will the president take action? The House of Republicans have set forth a plan for reform—should the president not provide his plan?”
Chairman Ryan added: “The Medicare Trustees continue to ring the alarm bell, and for the third year in a row, President Obama has failed to respond. Seniors, working families, and future generations cannot afford such irresponsible leadership. Republicans in Congress continue their efforts to save Medicare—offering solutions that protect those in or near retirement from any changes, while offering a strengthened, personalized Medicare program that future generations can count on when they retire. It is time that President Obama and his party’s leaders upheld their legal obligation to offer solutions and their moral obligation to protect the health and economic security of America’s seniors.”
Note: The Obama Administration has again ignored a legal requirement—known as the “Medicare Trigger”—that calls for the Administration to submit a proposal to Congress to shore up Medicare’s alarming fiscal imbalance. Under the requirements of the Medicare Modernization Act of 2003, if the Medicare Trustees determine the program faces a significant funding shortfall, a fast-track procedure is set in motion, requiring the president to submit a proposal that addresses Medicare’s imbalance within 15 days of the date upon which he submits his next budget. Last year’s warning should have resulted in a proposal from the president within 15 days of this year’s February 14 budget submission.
Nearly four months have passed since the president submitted his budget—the Medicare Trustees have again issued a dire warning regarding the program’s insolvency, yet the president’s plan is nowhere to be found.
To read the 2011 Medicare Trustees Report, please click here.
Sessions/Ryan letter is available online here.
Full text of the letter follows:
June 14, 2011
The Honorable Barack Obama
1600 Pennsylvania Avenue
Washington, DC 20500
Dear Mr. President:
Our country faces extraordinary economic challenges: a soaring budget deficit, a jobs deficit, and a leadership deficit in Washington that has resulted in our failure to confront a looming debt crisis. These fiscal problems are driven in large part by the unsustainable growth in health care entitlement programs and an inability to credibly face our budget challenges that severely undermines confidence in our economy. The failure of politicians to put forward real solutions that will save and strengthen these critical programs is threatening the economic security of American families and the health security of America’s seniors. Just last month, we learned that Medicare’s Hospital Insurance Trust Fund will become insolvent by 2024, only 13 years from now.
On May 13, 2011, the Medicare Trustees not only warned us that Medicare’s insolvency date had advanced five years since last year’s report but also confirmed that the program is now running a $32 billion cash-flow deficit. To pay current benefits, the program is redeeming tens of billions of dollars in treasury debt instruments and dramatically contributing to our nation’s surging publicly held debt. More troubling is that, in total, Medicare faces $36.8 trillion dollars in unfunded obligations over the next 75 years, according to Medicare’s non-partisan Chief Actuary.
For the sixth consecutive year, the Trustees have projected that general revenues will account for more than 45 percent of all of Medicare’s outlays. When Medicare breaches this limit, section 802 of P.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), requires the President to submit a legislative proposal to Congress to respond to the warning within 15 days of the next budget. Yet again, the Medicare Trustees have issued a funding warning that requires action by your administration. In fact, the Trustees have urged action “sooner rather than later” in order to “minimize adverse impacts on vulnerable populations.”
As Chairman and Ranking Member of the House and Senate Budget Committees, respectively, we are deeply disappointed that your administration continues to ignore this legal obligation. In 2008, the previous administration submitted a proposal to Congress that took steps to address Medicare’s fiscal imbalance. By contrast, your administration has not provided a response to the annual Medicare trigger, ignoring the law in each of the past three years. This year your budget did not even acknowledge the existence of the Medicare funding warning.
The country deserves honest leadership on this critical issue. The Fiscal Year (FY) 2012 budget that you submitted to Congress this year showed a lack of seriousness about the major fiscal challenges before the nation. And, although you abandoned this budget in a subsequent speech, your administration still has not formally submitted a revised FY2012 budget to Congress. Meanwhile, Senate Democrats have not passed a budget in 776 days, disregarding legal statute and further eroding the integrity of the federal budget process. Now more than ever is the time to fulfill our obligations under the law rather than skirt them, and we would respectfully suggest that this mandate extends to the Medicare warnings issued each year that you have been in office.
Under the budget you submitted to Congress, Medicare as we know it will soon be unable to meet its promises to current beneficiaries. Rather than impose cuts on current beneficiaries and leave Medicare bankrupt for future generations, the House-passed FY2012 budget resolution outlines reforms to preserve and protect Medicare for those in or near retirement while saving and strengthening the program for future generations. Given the severity of this problem and your legal obligations, the nation needs leadership on this issue. Therefore, we reasonably expect your administration to submit a detailed legislative proposal to Congress addressing the Medicare funding warning as required by law.
We look forward to receiving a proposal from you that responds to the Medicare warning and to working with you to strengthen the health and economic security of those we have the honor to serve.
Member of Congress
House Budget Committee
Senate Budget Committee