Privatization blues.

As Alexander Cockburn predicted in the last issue of The Progressive, Clinton is already making noises about establishing some big-wig bipartisan commission to "reform"' Medicare and Social Security. Make way for privatization!

Nothing shows the two major parties' commitment to corporate greed and contempt for the public interest better than the emerging bipartisan consensus that the government should privatize these crucial programs.

Privatizing Social Security, which is at no risk of running out of money for another forty years, would be a boon to the mutual-fund industry, which wants to get its hands on the retirement funds of the nation's elderly. No matter that the elderly themselves would then have to bear the risk when their investments go bad. As Mother Jones recently pointed out, mutual funds stand to gain $60 billion a year even from modest versions of privatization.

The assault on Medicare is equally frightening. "Privatizing Medicare would destroy the program," says Edie Rasell, an economist and physician who works for the Economic Policy Institute in Washington, D.C. "Privatization is a greater danger than even the severe cuts the Republicans proposed in 1995."

It's true that Medicare is in far more trouble than Social Security. The system is running out of money. But the reason is not "government inefficiency," as the Republicans and many Democrats have claimed. Actually, the administrative costs for Medicare typically run at 4 percent, whereas the administrative costs of private-sector health companies run about 25 percent. What we need is Medicare for everybody--universal health care.

The reason Medicare is in trouble is that the payroll tax that supports the Medicare trust fund has not increased since 1986.

A small increase in the payroll tax, or a more progressive income tax, could keep the program solvent for the next forty years, just as an 0.1 percent increase in income taxes starting in the year 2010 would keep Social Security solvent indefinitely.

But politicians don't want to talk about raising taxes even to pay for the most popular and useful of government programs.

The idea that we, as citizens of a democratic society, should pay into a common pool so that everyone benefits no longer holds sway. Big business, and its apologists in the media, have done their damnedest to discredit this idea, and to scare the American public that Social Security and Medicare are going bankrupt.

It's a convenient tactic for the business community, which stands to gain handsomely from dismantling these programs.

Just as the mutual-fund industry would reap windfalls from privatizing Social Security, the private insurance companies are lobbying hard for privatization of Medicare. Health-maintenance organizations know that they stand to gain a lot of money by eliminating the cost-controls that come along with the Medicare system.

Currently, Medicare patients (a group that includes the vast majority of our nation's elderly) pay a fixed rate for health-care services. Doctors can bill Medicare patients for no more than 15 percent above the fixed rate. Privatization would eliminate this cap.

Private plans, vouchers, and other alternatives to the current Medicare system would also erode public support for Medicare, and threaten the quality of care. Once wealthier Medicare patients leave the system, taking their clout with them, the momentum to cut funding, lower taxes, and erode the quality of Medicare would snowball.

While public officials extol the virtues of "consumer choice" in a free-market health-care system, large private firms know better.

Private employers are banding together to purchase health insurance and using the clout of a large patient base to get the best deal from the insurance companies. Medicare has been operating this way for the last decade, using the clout of its large pool of elderly patients.

To argue, in such a climate, that individuals should split off and go it alone, and use their tiny bargaining power to try to get good health insurance for a low price is ludicrous.