18 August 1999
Our current howler (part II): A tale of three numbers
Synopsis: In 1996, the Medicare debate was a tale of three numbers. The press corps kept giving you two.
The Surplus Illusion
Editorial, The Washington Post, 7/5/99
Chief of Panel Seeks Increase for Medicare
Robert Pear, The New York Times, 6/3/99
Commentary by Newt Gingrich
The NewsHour, PBS, 11/14/95
Tell Newt to Shut Up
David Maraniss and Michael Weisskopf, Touchstone, 1996
In its July 5 editorial, the Washington Post offered quick
response to the change in the projected federal surplus, arguing
that the cheerful projections were based on assumptions that were
almost wholly illusory. Writing about the 1997 balanced budget
agreement, the Post also offered an intriguing aside:
THE WASHINGTON POST: In the 1997 legislation, the president
and Congress were trying not just to balance the budget but to
give a tax cut. To do both they had to cut spending on paper,
if not in fact, but as ever they found it easiest to agree on
which spending not to cut...They ended up making a lot of cuts
in Medicare, some of which they may be about to ease, and
achieving most of the rest through a promissory note. [Our emphasis]
The possibility that 1997 Medicare cuts might be eased had
been reported in the New York Times a month earlier. Here is Robert
Pear's opening paragraph; Pear refers to Gail Wilensky, chair
of the Medicare Payment Advisory Commission:
PEAR: The head of a Federal advisory commission, an influential
Republican, said today that Congress should increase Medicare
payments for certain nursing home and hospital services because
budget cuts appeared to be harming the quality of care for some
The reference to a senior Republican complaining about 1997
Medicare cuts might surprise a casual observer. Throughout the
course of the 104th Congress (1995-96), the new Republican majority,
under Speaker Newt Gingrich, had pushed a balanced budget proposal,
always insisting that their budget proposal did not contain
Medicare "cuts." The battle over the GOP Medicare plan
became the defining issue of a two-year budget struggleand the
centerpiece of a battle about Bill Clinton's character. As the
1996 election approached, Gingrich was openly calling Clinton
a liar for his references to "Medicare cuts."
The 1997 Medicare adjustments were substantially smaller than
those the GOP had first proposed. The 1997 agreement called for
$116 billion in Medicare savings over five years; the original
GOP plan, in 1995, called for $270 billion in savings over seven
years. But here was Wilensky"widely respected by lawmakers
of both parties for her technical knowledge of the program,"
Pear saidsuggesting that some of the adjustments in spending
be rolled back closer to previous levels.
If a casual observer were confused, one could offer a simple
explanation. The Medicare debate of 1995-96 was the press debacle
of the decadea two-year descent into conceptual chaos in which
the entire mainstream press corps took part. As the debate unfolded,
press and public were each confounded by aggressive arguments
from the new Congressional leadership, in which Speaker Gingrich
repeatedly insisted there were no "cuts" in the GOP
plan. Over time, the Speaker's arguments largely won the day;
by mid-1996, the press corps was generally convinced that Clinton
was deceiving the public with his talk about Medicare "cuts."
Now here was Wilensky, saying that patient care had been adversely
affected by the more modest 1997 agreement. How to explain the
apparent disconnect between this state of affairs and the GOP's
In fact, the original GOP Medicare argument was one of the
truly remarkable sophistries of recent yearsa casuistic presentation
which the press corps never challenged in two years of numbing
debate. In the argument, Speaker Gingrich and his followers routinely
presented just two parts of a three-number story, grossly misleading
all who heard them, including the mesmerized press. Anyone who
followed politics during the 104th Congress heard the Speaker's
standard argument. Here it is, as expressed on the NewsHour,
in November 1995:
GINGRICH: President Clinton talked about Medicare cuts [in
the GOP budget]. There are no Medicare cuts. We increase Medicare
from $4800 per senior citizen [in 1995] to $6700 per senior citizen
[in 2002]...That's an increase, that's not a cut.
Anyone who followed the Medicare discourse heard some version
of this two-number presentation, in which Gingrich compared 1995
spending ($4800) to proposed 2002 spending ($6700) to prove there
were no "cuts."
Omitted was a crucial third number. At the time that Gingrich
appeared on the NewsHour, the Republican-supervised Congressional
Budget Office was estimating that it would cost around $8000 per
recipient, in the year 2002, to maintain the current Medicare
program. The Republican budget proposed spending $6700 per person
on a program it would cost $8000 to maintain. Obviously, when
that third number was thrown into the mix, Gingrich's cheerful
budget proposal took on a whole new aspect.
To be fair, the Republicans were recommending changes in Medicare
designed to make it more cost-effective. But could the Republicans
maintain the established level of services at the spending level
they had proposed? Most citizens would at least have wondered
about that, had they been given all parts of this three-number
story. But throughout 1995 and 1996, Gingrich made his presentation
on major news showsand we never once saw the third number mentioned.
No one attempted to put the GOP spending proposal into a meaningful
One pair of journalists did put the third figure before the
press and public. In 1996, David Maraniss and Michael Weisskopf
of the Washington Post published "Tell Newt to Shut Up,"
a book on the "Republican revolution." (The
book was excerpted in the Post in December 1995.) In an invaluable
chapter on the Medicare battle, the writers described the GOP
MARANISS AND WEISSKOPF: Average spending per recipient in the
Republican plan rose from $4800 to $6700 in seven years, numbers
that were etched in the minds of every Republican. But when quality
of service was factored in, Democrats scored big. To provide today's
level of service seven years later would cost $8000 per beneficiary.
And premiums for more pensioners would rise to help generate the
huge savings Republicans had envisioned.
Maraniss and Weisskopf, almost alone in the press corps, managed
to cite the third number. But they were clearly wrong in their
second sentence above; Democrats never "scored big when quality
of service was factored in," because quality of service was
virtually never "factored in" in the course of the two-year
debate. The public was virtually never given that crucial third
numberwas never told how much it would cost to maintain the existing
program. Because of that remarkable breakdown, the public received
little warning that the Republican plan might lead to cuts in
servicesthe process that is now being acknowledged and addressed
in Wilensky's report to the Congress.
Throughout 1995, the proposal to spend $6700 per person on
an $8000 program was described by the Speaker as a "40% increase
in Medicare." The press corps' failure to clarify this presentation
was the public information debacle of the decade. More tomorrow
on that failed discussion, which managed to grind on for an astounding
two years. And we begin to explain our central question: why a
press corps which was able to clarify the surplus discussion proved
so hapless in the Medicare debate.
Tomorrow: We begin to explain why the press corps failed
to clarify the Medicare discourse. And we offer links to more
detailed discussions of the 1995-96 Medicare debate.
Note on numbers: In late November 1995, the GOP adjusted its
spending proposal upward. From that point on, it proposed spending
$7100 per Medicare recipient in the year 2002.