As Medicare approaches its 30th anniversary, its desperate financial situation is at the top of House Speaker Newt Gingrich's agenda. The Clinton Administration refuses to submit a proposal to save Medicare-Republicans will have to take the heat. Testifying before the House Ways and Means Subcommittee on Health on May 25, 1995, Jane M. Orient, MD, Executive Director of the Association of American Physicians and Surgeons (AAPS), stated that she could not present a plan to save the system either.

``It is a serious offense to lie to Congress,'' she said. ``The handwriting is on the wall. Medicare cannot be saved.''

Various plans have been presented, of course, but Dr. Orient likened them to remodeling the executive suite on the top floor of the Oklahoma City federal building. A demographic bomb-baby-boomer retirement-is about to hit.

The problem is not a population explosion but rather a birth dearth. Medicare is a pyramid scheme. Its survival depends on having ever increasing numbers of workers to tax. And the baby boomers have not even replaced themselves.

Senior citizens believe that they have paid for their Medicare benefits, but that is simply untrue. Most current retirees will withdraw about five times as much as they paid in. As to young people, they are more likely to believe in UFOs than in their chances of ever collecting from Social Security or Medicare.

Medicare is not insurance. It is socialized medicine, and one of a myriad of examples showing that socialism doesn't work. The system is fundamentally immoral because to ``give'' the Medicare benefits, the government must first take the money from someone who earned it.

In 1966, the maximum tax for supporting the Medicare Part A hospital insurance (HI) fund was $46.20. Now, there is no maximum. Of every dollar earned in wages, 2.9 cents goes to the HI fund. (The statement that the employer pays half is an accounting fiction.) Current expenditures are already exceeding income, and the ``Trust Fund'' will be totally depleted around 2002. Under ``optimistic'' projections, the fund will last a little longer; ``optimistic'' means that senior citizens will die sooner.

In fact, the Trust Fund has already been raided to lower past federal deficits. Redeeming the IOUs with which it is stuffed will add to future deficits.

It is not possible to increase the payroll tax enough. By 2040, the Medicare portion of the payroll tax alone would consume between 10.6 and 20.26% of payroll. Neither productivity nor domestic peace can survive confiscatory taxation.

The payroll tax is only a portion of what workers pay to support Medicare. Part B premiums are 75% subsidized from general income tax revenues. Additionally, workers bear the brunt of cost shifting and medical inflation caused by Medicare. Private markets have reached the limit for tolerating the cost shift.

Some tout ``managed care'' as the solution. Medicare HMOs are paid 95% of the actuarial value of the patients' benefits. A portion skimmed off the top pays the executives for making the rationing decisions. So far, the HMOs are overpaid by at least 6%─and the rationing has not seemed too severe─because the sicker patients are reluctant to join. If all joined, cuts in service would be drastic, and improvement in Medicare finances insignificant at best.

The Medicare trustees have warned repeatedly of impending collapse. The cracks in the foundations have long been obvious. The federal government has responded by attempting to seal off the exits to the building. Physicians who treat Medicare-eligible patients outside the system─without accepting funds from the bankrupt federal Treasury─are threatened with Draconian fines, even though no one has yet been able to cite a law or a regulation that forbids a patient to pay for medical care with his own money. (As far as we know, the threats have not yet been implemented, and a few physicians are still willing to treat patients enrolled in Medicare Part B as private patients.)

Today, both Medicare patients and those who care for them are trapped into dependency on a failed government system. It is time to admit that the system is fatally flawed and will self-destruct.

The only question is: will we extricate as many victims as possible, while laying a sound foundation for a structure based on truth and freedom? Or will we practice denial until the system crashes and burns, bringing down the rest of the economy with it?

[For further details, including AAPS testimony to Congress and information on private contracting, write to AAPS, 1601 N. Tucson Blvd. Suite 9, Tucson, AZ 85716.]

DDP has joined with about forty of the nation's leading think tanks to provide materials through the Heartland Institute's FAX on demand service. The service is used by reporters, legislators, educators, and others. For information, dial (510)208-8000 from a touch-tone phone. You can instantly obtain a document of your choice for $5. Topics include environment, health care, regulation, and education. Contributors include the Competitive Enterprise Institute, the Cato Institute, the Hoover Institution, the Fraser Institute, and Environmental Education Enterprises.

The first ``Corrections Day,'' a day set aside by the House of Representatives to consider only legislation to repeal outdated, useless, or just plain dumb regulations, could be held as early as the first week in June. It might occur as often as once a week─Congressional leaders are working out details.

Hill staffers are collecting candidates for repeal. FAX your nominations to Mildred Webber of the House Government Reform and Oversight Committee at (202)225-2441; Monica Vegas in the Office of the Majority Whip at (202)225-5117; or Mike Piper in Rep. Barbara Vucanovich's office at (202)225-2319.

Regulatory victim stories are being collected by the NBC Nightly News. Send stories that might be suitable, along with supporting documentation, to Rich Gardella, NBC Nightly News, 30 Rockefeller Plaza, Room 324B, New York, NY 10112.

Regulatory victims are also being sought by Senator Frank Murkowski (R-AK), Chairman of the Committee on Energy and Natural Resources. Contact James P. Beirne, Senior Counsel to the Committee at (202)224-2564. A data base of cases in which Americans have lost property due to excessive regulatory enforcement is being collected by the National Center for Public Policy Research. The Center promises not to publish names and addresses and to screen interview requests. To obtain more information or a survey form, contact Bob Adams or David Ridenour at (202)543-1286 and ask about the ``Directory of Regulatory Victims.''

[The above information is from FAX alerts sent by The Relief Report, published by the National Center for Public Policy Research, 300 Eye St., NE, Suite 3, Washington, DC 20002.]

Opponents of regulatory reform─who lapped up horror stories about Alar and dioxin─are horrified by bona fide victims stories of government harm. They are afraid that the tactic might work (CEI Update, March 1995).