WITH A GENERAL slowing of social welfare spending in recent years and continuing rapid growth of the big social insurance programs, other domestic spending -- help for the cities, national parks, welfare, jobs and education -- has been feeling a squeeze even before the $38 billion in federal budget cuts now aimed primarily at such spending. Unless the public is willing to accept near abandonment of some of this expenditure, the administration will have to take on the social insurance programs to make good on its commitment to cut another $40 billion or more from federal spending by 1984.
Over the last decade, social insurance programs have grown at an enormous pace. Between 1970 and 1980, Social Security retirement and disability benefits quadrupled, and Medicare payments for those same beneficiaries increased fivefold.For part of the decade, the post-Vietnam "peace dividend" supported this expansion. More recently, with defense spending again on the rise, the pressure on other parts of the budget has become acute.
The budget cuts now before Congress include some nicks in Social Security and Medicare, but nothing of the size or scope likely to be needed in future budget rounds. The administration is still licking its wounds from its first try at more substantial Social Security savings. Taking on the medical programs -- Medicare and the companion program for the poor, Medicaid -- will arouse not only the same important part of its constituency alarmed by the Social Security proposals, but the powerful medical lobby as well. Cutting medical aid, moreover, raises issues that go well behong politics. Medicare and Medicaid are expensive not because of widespread abuse and misdirected priorities, but because they pay for things that people find valuable for themselves and others.
Rising hospital costs are the major factor in Medicare's startling growth -- another doubling of the program is predicted by the Congressional Budget Office in the next five years -- but this is because nurses and other hospital workers are still underpaid and because the kinds of diagnosis and treatment that hospitals can offer are increasingly sophisticated and expensive. Medicaid's big cost item is also care for the old and seriously disabled. Medicaid now pays for half of the nation's nursing homes and other long-term care, a welcome replacement for the burden on relatives and ghastly charity wards of the past. Medicaid is also the nation's ad hoc subsititue for catastrophic health insurance -- about 45 percent of its payments are made not for the chronically poor -- the welfare caseload -- but for the "medically needy," people who have exhausted their resources on medical expenses.
More careful use of expensive medical care should be encouraged. But there is no way -- short of a decision to curb medical technology or limit its availability to the wealthy -- to avoid most of these costs. Private insurance cannot take up the burden for the retired, with their generally limited income, or for those who are chronically ill, disabled or unemployed. This has rightfully become a public responsibility in a society that expects and enjoys a high standard of medical care. As hard as the first round of budget cuts has been for all concerned, the next round, in which these very serious issues of public policy must be addressed, will be still harder.