Majority Leader Hoyer: Democrats Will Not Succumb to Phony, False Alarm on Medicare Financing

For Immediate Release:

July 24, 2008

Contact:Stacey Farnen Bernards
(202) 225 - 3130

WASHINGTON, DC – House Majority Leader Steny Hoyer released the following statement today after the House of Representatives voted to suspend for the 110th Congress a provision that would arbitrarily require cuts in Medicare.  That provision – the so-called “45 percent trigger” – was included in the Republican-drafted Medicare Modernization Act, which passed Congress in 2003.  Specifically, the Republican-drafted provision provides that if general revenues are projected to exceed 45 percent of overall Medicare spending within a seven-year window in two consecutive years that the President must propose legislation to move general revenues back under the 45-percent threshold:
           
“Republicans have long sought to dismantle the Medicare program, and Democrats simply will not succumb to their chicanery.  Here’s the reality, Medicare was designed to be substantially financed by general revenues, not payroll taxes.  The fact that a large portion of Medicare is financed by general revenues is not problematic.  Furthermore, the 45-percent trigger inserted by Republicans in their prescription drug bill in 2003 in the dead of night was designed to do one thing: set off false alarms about Medicare’s financing.  This 45-percent trigger is completely arbitrary, and fails to provide a meaningful measure of Medicare’s fiscal health.
           
“It is particularly ironic that reforms included in the Medicare Improvements for Patients and Providers Act (MIPPA) – legislation enacted over the President’s veto – actually would reduce Medicare funding from general revenues to less than 45 percent.  In fact, according to the Congressional Budget Office, MIPPA delays the onset of the trigger for the exact amount of time as the President’s proposal.  However, due to a technicality, the passage of MIPPA did not remove the trigger requirement for this year.
           
“This is obviously a complicated but important issue.  But America’s seniors and other citizens should know this: Democrats believe in Medicare.  That’s why we fought to establish the program.  And now, we will continue to work to improve Medicare and to strengthen its long-term solvency.”
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