Schizophrenia Daily News Blog

New US Federal Budget Proposal Cuts Medicare by $560 Billion, Increases Military Spending

It was reported in all the major news sources this morning that the Bush administration would cut roughly $560 billion from Medicare (the medical insurance system for the elderly and disabled people in the country) over the next decade but would leave intact program subsidies to insurers worth an estimated $150 billion over the same period. At the same time military spending is increasingly rapidly - with over $515 Billion is allocated to Military spending, a record amount since the second world war.

Medicare is the number one source for treatment of people who suffer from schizophrenia. Over 78 percent of hospital stays for schizophrenia were billed to the government (35.0 percent to Medicaid and 43.5 percent billed to Medicare (source). In fact Medicare is the second largest public payment system for mental health services in the United States, and it has been estimated in a 2001 academic study that about 433,500 Medicare beneficiaries in the United States in 1995 had a diagnosis of schizophrenia.

The cuts would slow the program's projected annual growth rate from 7% to 5% and are needed to slow "the unsustainable growth in entitlement spending," President Bush said in a letter to Congress submitting his last budget plan.

"If we do not address this challenge, we will leave our children three bad options: huge tax increases, huge deficits, or huge cuts in benefits," Mr. Bush said.

At the same time, Mr. Bush's budget calls for about $515 billion to be allocated to the Defense Department for the fiscal year that starts Oct. 1, stated the Wall Street Journal today. If passed by Congress, that would be the largest military budget -- adjusted for inflation -- since World War II. The Wall Street Journal also reported today that "The budget also includes a separate request of $70 billion for Iraq and Afghanistan for the first quarter of fiscal 2009 alone. For this fiscal year, Congress has yet to approve additional spending of about $102 billion the White House has requested for the two conflicts."

The US Congress has already approved $691 billion in war spending since 2001, the total cost of the Iraq and Afghanistan wars are expected to rise to approximately $900 billion by next spring and $1 trillion mark by the end of 2009.

Groups are beginning to realize the tremendous trade off that the Iraq war has resulted in. The Wall Street Journal reported on a TV ad that stated "health care for 1.7 million kids costs the same as just one week in Iraq. But Republicans in Congress" helped President Bush to block the program's expansion.