Bill Clinton: “Well, the way you can--arguably, Medicaid is underfunded now, although the truth is that it's wrongly funded. That is…”

“Well, the way you can--arguably, Medicaid is underfunded now, although the truth is that it's wrongly funded. That is we're spending money on the wrong things. The Medicaid budget is still going up, over the next 5 years is projected to go up somewhere between 16 percent next year and 11 percent in the 5th year, in other words, over 4 times the rate of inflation next year. Social Security, believe it or not, is now overfunded. That is, it got underfunded 10 years ago. If people hadn't made the right projections for the--it is now overfunded, but the overage is all being used to make the deficit look smaller. So we're going to have to stop spending Social Security on the deficit if you don't want the payroll tax for Social Security to bankrupt small business. Because when I, people my age--I'm the oldest of the baby boomers, people born from '46 to '64--when we start retiring in the next century, we cannot at that moment still be using the Social Security tax to make the deficit look smaller, which is another reason it's so important to get control of this deficit now. We just can't do it. The answer to your question, sir, is Social Security is basically under control if we bring the deficit down. The problem with the Medicare and Medicaid system is that it can't control its membership since the system, the private system, is hemorrhaging. And it is based on a fee-for-service system where there is no regularization of benefits and where many of the beneficiaries don't assume any responsibility for themselves. So what we're going to try to do is to increase the amount of personal responsibility in the system as well as put some cost controls. Then, instead of just paying a fee-for-service system, what we want to do is put Medicare and Medicaid--starting with Medicaid because Medicare actually works pretty well, it's adequately funded and well- administered--but Medicaid, we want to put those folks in the same kind of health alliances so they'll be in competition, to go back to what you guys said, so there will be some competition for the services. Florida has started to do that, and their preliminary indications are there's going to be a big reduction in the cost of Medicaid if we do it. In other words, I think the mistake has been not to have Medicaid subject to the same sort of competitive environment that the bigger private sector employers are. If you put small business and the Medicaid in where a lot of the bigger employers are now and the public employees, you're going to see a real modification of the cost trends in the outer years in ways that will help you all as taxpayers as well as employers. Thank you very much. They say we've got to go. I wish we could stay. You were great. Thanks.”