Is Bush Raiding Social Security, Medicare?

Seniors should watch closely, however, moves by the Administration on Social Security and Medicare. They are moving very close to the endangerment of these funds.

The Office of Management and Budget projected a fiscal 2001 surplus of $158 billion, just $1 billion above the tax receipts that flow to Social Security. The revision is $123 billion less than the last estimate in April but the surplus still will be the second-largest ever.

The forecast projects a similarly tiny non-Social Security surplus of $1 billion in fiscal 2002, which begins Oct. 1. That represents a $58 billion drop from the April estimate, for an overall surplus of $173 billion next year that is almost entirely Social Security.

The fiscal 2001 surplus figure includes an accounting change criticized by Democrats that effectively shifted $4.3 billion from the Social Security trust fund to regular government accounts. This enabled the administration and congressional Republicans to say that, just barely, they kept a promise not to dip into Social Security for other government operations.

The nonpartisan Congressional Budget Office, whose estimates Congress must follow, plans to release its own surplus update next week. Many analysts on Capitol Hill expect the CBO to show that a small portion of the Social Security surplus will be diverted to other government purposes this year.

The Bush budget still includes $37 billion over the next 10 years to add drug coverage and other changes to Medicare.

On Medicare, the OMB estimates a $32 billion surplus for Part A, which pays hospital costs. That surplus will be shifted to cover unpaid costs such as doctor bills from the program's Part B. Without that money and other cash from general government accounts, the White House estimates, Part B would face a $48 billion shortfall this year.

Democrats contend that this still amounts to a raid on Medicare – Part B always has been paid for with general revenue – breaking a bipartisan commitment to keep both Medicare and Social Security walled off in a so-called "lock box." Republicans say that's a distortion.