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A Medicare Miscalculation
Aired January 30, 2004 - 06:25 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A Medicare miscalculation, and not a little one. President Bush's prescription drug package will cost an extra $134 billion. Total cost for the new Medicare? $534 billion. Law makers, conservative and liberal, are upset about this.
Let's go a little deeper now.
Live to D.C. and our producer Paul Courson -- good morning, Paul.
PAUL COURSON, CNN CORRESPONDENT: Good morning.
Welcome back.
COSTELLO: Thank you very much.
It's good to be back.
How did this miscalculation occur?
COURSON: It turns out the estimates early on, Carol, were done in a somewhat casual fashion. The estimates that are offered up now are said to be done more specifically and it also looks like more people might participate in the Medicare reform plan.
The cost estimate is now about 30 percent higher than it was just two months ago when Congress passed the legislation.
Let's look at some of the numbers. To overhaul Medicare over the next decade, it looks like the price tag will now top $500 billion, and that's quite a jump from a couple of months ago, when the estimated price tag was around $400 billion.
Other estimates to come out with the plan on Monday include a forecast for the current fiscal year, the one we're in right now. Over spending now estimated at $520 billion by the end of fiscal year '04 and compare that with last year's deficit at $375 billion. That, by the way, was the highest on record in terms of dollar amounts.
Carol, the Medicare estimated cost is up, as I said, because more people are liable to participate and the estimates themselves are said to be more refined. And, of course, we do have President Bush's State of the Union pledge to try and cut spending in half over the next five years. This kind of estimate revision upward is liable to make that more of a challenge.
COSTELLO: Oh, you're not kidding. Boy, the numbers are just mind boggling. You know, at a human level, do seniors have to worry about this, because law makers can make changes in the Medicare law even now, can't they?
COURSON: That's true. The Medicare program is such an all encompassing system that the changes can be refined at the macro level or at the micro level. The conservatives and others who are looking at the red ink that the government is running up are concerned with its effect on the economy more broadly, which might affect yourself and me and anyone who has got credit. In a lot of cases, when the federal deficit reaches past a certain point, it puts upward pressure on interest rates, which, in turn, can draw money out of the stock market if corporations have to pay more for their money. And, of course, at the mortgage level and at the credit card level you're liable to be spending more money, too, if the deficit is too bad, economic activity doesn't pick up swiftly enough and the red ink gets higher.
COSTELLO: All right, Paul Courson live from D.C. to make things more clear for us. And you certainly did.
Thank you.
COURSON: Have a good weekend.
COSTELLO: You, too.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 30, 2004 - 06:25 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A Medicare miscalculation, and not a little one. President Bush's prescription drug package will cost an extra $134 billion. Total cost for the new Medicare? $534 billion. Law makers, conservative and liberal, are upset about this.
Let's go a little deeper now.
Live to D.C. and our producer Paul Courson -- good morning, Paul.
PAUL COURSON, CNN CORRESPONDENT: Good morning.
Welcome back.
COSTELLO: Thank you very much.
It's good to be back.
How did this miscalculation occur?
COURSON: It turns out the estimates early on, Carol, were done in a somewhat casual fashion. The estimates that are offered up now are said to be done more specifically and it also looks like more people might participate in the Medicare reform plan.
The cost estimate is now about 30 percent higher than it was just two months ago when Congress passed the legislation.
Let's look at some of the numbers. To overhaul Medicare over the next decade, it looks like the price tag will now top $500 billion, and that's quite a jump from a couple of months ago, when the estimated price tag was around $400 billion.
Other estimates to come out with the plan on Monday include a forecast for the current fiscal year, the one we're in right now. Over spending now estimated at $520 billion by the end of fiscal year '04 and compare that with last year's deficit at $375 billion. That, by the way, was the highest on record in terms of dollar amounts.
Carol, the Medicare estimated cost is up, as I said, because more people are liable to participate and the estimates themselves are said to be more refined. And, of course, we do have President Bush's State of the Union pledge to try and cut spending in half over the next five years. This kind of estimate revision upward is liable to make that more of a challenge.
COSTELLO: Oh, you're not kidding. Boy, the numbers are just mind boggling. You know, at a human level, do seniors have to worry about this, because law makers can make changes in the Medicare law even now, can't they?
COURSON: That's true. The Medicare program is such an all encompassing system that the changes can be refined at the macro level or at the micro level. The conservatives and others who are looking at the red ink that the government is running up are concerned with its effect on the economy more broadly, which might affect yourself and me and anyone who has got credit. In a lot of cases, when the federal deficit reaches past a certain point, it puts upward pressure on interest rates, which, in turn, can draw money out of the stock market if corporations have to pay more for their money. And, of course, at the mortgage level and at the credit card level you're liable to be spending more money, too, if the deficit is too bad, economic activity doesn't pick up swiftly enough and the red ink gets higher.
COSTELLO: All right, Paul Courson live from D.C. to make things more clear for us. And you certainly did.
Thank you.
COURSON: Have a good weekend.
COSTELLO: You, too.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
