(eToro Blog) Healthcare is an issue again on the floor of the U.S. Senate, but this time it's the well-known, often disparaged, Medicare system. Medicare is the social services program which provides healthcare primarily for the nation's senior citizens and other uninsured individuals with certain permanent disabilities. Republican senators had hoped that they would find enough support to abolish the Medicare program as it now exists in favor of privatization. In a 67 to 40 vote (with three senators abstaining) it was decided to table the proposal.

If the Republic party had succeeded in their attempt, it would have gone a long way to slash the federal deficit. Currently, for every dollar the federal government earns, 22% of it goes to Medicare payments. Under the now-tabled proposal, the status quo would continue for those individuals now 55 or older, but future senior citizens would be provided with vouchers so that they could buy their own health insurance privately. Had the proposal passed and eventually made into law, according to the bill's originator it could have cut some $4.4 trillion off the federal budget over the next decade.

Democrats argue that the Republican way of reducing the federal deficit will place a significant burden on the backs of country's senior citizens and poor. Preliminary estimates suggest that senior citizens' costs would rise by nearly $6,000 a year. The failure of the most recent attempt to overhaul Medicare notwithstanding, most politicians agree that the social program, the second largest expense to the federal government after Social Security, needs some serious revamping.

With an election year on the horizon, more debates over how best to reduce the federal deficit will clearly begin to emerge. It's also clear that a credible and comprehensive policy which can reduce the federal budget deficit is of utmost importance. Until then, the U.S. Dollar will continue to be under pressure.

Copyright 2011 eToro Blog