Deficit overshadows social issues in '89

There is little mystery about which new domestic social issues this year's Congress will talk about. Just about everyone's short list focuses on day care, health insurance for the 37 million uninsured Americans, and nursing care for the elderly, both in nursing institutions and in their own homes. There's equally little mystery about how many expensive new programs the Democratic-controlled Congress will actually enact: few. Maybe none.

The problem? Money. Despite genuine concern over these and other unmet social needs, Congress instead will focus on ways to reduce the yawning national budget deficit.

On Capitol Hill this year ``deficit reduction efforts will be the star of the show,'' says a key congressional staffer who asked not to be identified. He and others say that proponents of expensive social legislation will quickly find themselves on the defensive. They will have to devote more time to protecting existing programs from budget-cutters rather than passing new ones.

Some experts think Congress will not only hold hearings but actually pass a modest beginning of at least one new program, the deficit notwithstanding. ``I think we'll see some action in Congress'' on child care, says Alice Rivlin, director of economic studies at the Brookings Institution. Dr. Rivlin says it is not yet clear what such action would be.

Two divergent ways to meet day care needs are already in view. Last year Congress considered a bill a that would have provided federal funds to increase the supply of day care centers and set standards for them. The proposal failed when proponents of differing plans could not reach a compromise. In his presidential campaign George Bush took a different tack, proposing tax credits be provided to parents whose children are in day care.

Several congressional hearings and much discussion are likely on the issue of health insurance for the uninsured. But any new program to fill this gap for 37 million Americans generally is viewed as a long shot. The program's cost would be immense as care costs continue to rise faster than the general rate of inflation.

Similarly, in Congress ``there's a lot of interest,'' as Dr. Rivlin notes, in providing funds to pay at least some of the cost of the long-term care that millions of Americans require annually. ``But it's quite expensive,'' she adds, ``so we may not see any action on that for a while.''

Most of the 1.5 million elderly Americans now in nursing homes require such long-term custodial care; many more receive such aid in their own homes. In both cases virtually all of the costs today are borne by the individuals themselves, their families, or - if they have largely exhausted their assets - by the government's medical program for the poor, medicaid.

In its consideration of long-term care, Congress is likely to pay particular attention to plans that would provide payments by combining government assistance and private insurance. Newly elected Senate Majority Leader George J. Mitchell (D) of Maine has proposed one such measure. Senator Mitchell's plan would have government pay the cost for only the relatively few elderly Americans who stayed more than two years in nursing homes. The costs of those whose stays were shorter presumably would be borne by private insurance.

Both liberals and conservatives generally agree that some kind of financial assistance, either from government or expanded private insurance, should be available to Americans in a nursing home or with a family member in one. But no consensus exists as to where the money should come from; thus, no broad congressional action is likely this year.

Congressional action on medicare - the government program to pay some medical costs for the elderly - will be aimed at holding down costs. Medicare reimbursements to hospitals are expected to reach $50 billion in fiscal 1989.

Capitol Hill sources say that as Congress examines domestic social programs in its effort to reduce the budget, it is likely to look first at these hospital expenses. These costs are projected to grow this year at almost three times the 4 percent general inflation rate. Congress is likely to further squeeze hospitals by cutting reimbursements they receive for treating the elderly.