President Clinton's 2000 Budget Focuses on Social Security and Healthcare

Strategic Insights -

President Bill Clinton highlighted the need to meet the rising medical costs of the ageing baby boomer generation while focusing on boosting social security. The budget prioritizes the $217bn Medicare scheme, which is expected to run out of cash in 2008. To maintain the programme, Mr. Clinton proposed using one out of every six dollars of the surplus for the next 15 years, guaranteeing its soundness for an additional 12 years. This move would enable the programme to continue until 2020.

Key Takeaways:

  • The Medicare scheme will be the second largest beneficiary of the government surplus after social security, taking $686bn over the next 15 years.
  • The number of elderly people claiming Medicare will "explode" as the baby boom generation begins to reach age 65, reaching 61.3m in average annual growth.
  • The budget revives Democratic senators' plans to extend Medicare to allow 300,000 people to buy into the fund, and guarantees retired people over the age of 55 the right to buy into company-sponsored health plans.
  • The president proposes offering families a tax credit worth $1,000 a year to help meet the cost of long-term healthcare for elderly or disabled relatives, benefiting about 2m people and costing $5.5bn.
  • Medicare patients will have more opportunities to take part in clinical trials for new cancer treatments.
  • Education spending will rise from $28.6bn to $31.8bn in 2000, including a second year of funding for the plan to add 100,000 new teachers to US classrooms by 2005.
  • The president revived plans for a $22bn package of school construction and modernisation bonds.

Statistics:

  • Medicare will receive $686bn over the next 15 years.
  • The number of people enrolled in Medicare will grow from 37.6m in 2006 to 61.3m in 2010.
  • The average annual growth in Medicare will double after 2010.
  • 2m people will benefit from the new tax credit plan.
  • The tax credit plan will cost $5.5bn.
  • Education spending will rise by $3.2bn in 2000.

Sources:

  • The Financial Times, 1999.