"The projected numbers released by CBO on the rising costs of Medicare and Medicaid are astonishing," said Chairman Tauzin.  "This is a rude awakening for Congress which must immediately begin its work on reforming both programs.

"Our Committee is prepared to hold hearings and draft legislation that will adequately address the needs of America's seniors and future Medicare and Medicaid beneficiaries.  Congress cannot just throw more money into these programs; instead, we must work together to ensure that both programs are sufficiently and efficiently updated to continue to adequately serve the health care needs of all beneficiaries."

According to CBO, all mandatory spending -- led by Social Security, Medicare and Medicaid which together account for 71 percent of mandatory spending -- currently consumes more than half of the federal budget.  If current policies remain in effect, mandatory spending will continue to outpace other spending and will reach 69 percent of federal outlays by 2013.

Specifically, over the next 10 years, CBO projects that Medicare spending will grow at an average rate of 6.8 percent per year through 2013.  As a result, Medicare spending is expected to reach $521 billion by 2013, up from $269 billion in 2003.

During that same period, Medicaid spending is projected to rise at an average annual rate of 8.5 percent, pushing federal expenditures from $157 billion in 2003 to $356 billion in 2013.

"President Bush has promised to set aside $400 billion for Medicare modernization and a prescription drug benefit.  With this in mind, Congress can no longer stand idly by as costs continue to rise.  The time to act is now.  Our grandchildren will thank us," concluded Chairman Tauzin.

The House Energy and Commerce Committee has scheduled a Medicaid hearing on Thursday (February 6) at 10:00 a.m. in room 2123 of the House Rayburn Building.  Florida Governor Jeb Bush will testify before the Committee to discuss current Medicaid problems and some of Florida's success stories.