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The Wrong Entitlement Debate

The release of the latest official status report on the Social Security and Medicare trust funds -- which unsurprisingly finds that both are suffering somewhat due to the recession -- has spawned the predictable headlines of doom.

After all, the way things are going now, Social Security won't be able to pay retirees full benefits by today's rules -- in 26 years. Medicare, I'll grant you, is a vastly bigger problem, as a lot needs to be done in the next nine years to prevent a deficit.

What I don't understand, however, is why almost no one is focusing on the more immediate problem, namely the extraordinary damage that the recession and foreclosure crisis have done to the nest-eggs of the the current crop of retirees and near-retirees. Why is there no discussion about a short-term boost in benefits, especially for lower-income people? After all, isn't it reasonable to expect that enormous declines in the stock market and home values are translating into more severe poverty for the elderly?

Alas, that's not what Washington is talking about. As Amy Goldstein writes in The Washington Post, the new numbers "intensify a political debate, gathering strength among Democrats and Republicans, over how quickly President Obama should tackle Social Security when health-care reform is his administration's most urgent domestic priority....

"Congressional Republicans and some Democrats seized upon the findings to argue that the administration should work rapidly to ward off the looming insolvency of Social Security and Medicare."

Robert Reich writes a little reality check for TPM Cafe: "Even if you assume Social Security is a problem, it's not a big problem. Raise the ceiling slightly on yearly wages subject to Social Security payroll taxes (now a bit over $100,000), and the problem vanishes under harsher assumptions than I'd use about the future....Social Security would also be in safe shape if it were slightly more means tested, or if the retirement age were raised just a bit. The main point is that Social Security is a tiny problem, as these things go.

"Medicare is entirely different. It's a monster. But fixing it has everything to do with slowing the rate of growth of medical costs -- including, let's not forget, having a public option when it comes to choosing insurance plans under the emerging universal health insurance bill....

"Look more closely and the real problem isn't even health-care costs; it's a system that pushes up costs by rewarding inefficiency, causing unbelievable waste, pushing over-medication, providing inadequate prevention, over-using emergency rooms because many uninsured people can't afford regular doctor checkups, and spending billions on advertising and marketing seeking to enroll healthy people and avoid sick ones."

By Dan Froomkin  |  May 13, 2009; 11:45 AM ET
 
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Comments

Members of Congress like to perceive themselves as middle income workers, so why don't we simply tax individual earned income up to the level of income that Congress receives? That would not only take care of the revenue problem immediately, but would also assure that an escalator clause would be built in to future revenues.

Posted by: oldbob | May 13, 2009 12:22 PM | Report abuse

How can supposedly intelligent people fail to see that the European nations have mostly solved this very problem with their versions of Social Security and actual national health insurance while we dither about how the medical profession is ripping off the government here (and ripping off average citizens as well). OK, the Europeans have several variations on medical plans, but all provide better overall health care than our system, which delivers outstanding care only to the wealthy and the lucky with good health insurance.

On top of everything, our automobile industry cannot be competitive as long as they have to provide health care to their employees, which their overseas competitors do not have to worry about! How did we get so stupid?

Posted by: ianmac37 | May 13, 2009 12:49 PM | Report abuse

Let's also cut the crap about how the 'boomers' will destroy SS. Boomers have been over-paying SS taxes since 1983, which is why the program always has an annual surplus.

No only have 'boomers' paid the benefits for retirees since 1983, they have also been socking away vast amounts of money (see SS Trust Fund) to pay for their own retirement benefits.

Posted by: toweringqs | May 13, 2009 1:12 PM | Report abuse

All earned income should be subject to the Social Security Tax. This law could be introduced, passed, and signed in a week. That would be easy except those who pay lobbyists make more than $100,000 and will not allow their taxes to go up. Even Democrats who say they would favor higher taxes won't when it comes down to actually doing it.

On the Medicare/Universal Health Care debate, we already have universal health care. My premiums and charges, and yours if you have health insurance and/or Medicare, are higher to pay the costs for people who don't have coverage. The only thing is that these costs are run through insurance companies who work on a "Cost-Plus" basis that drives up the overall cost even more. There is nothing inherently wrong with cost-plus, it just adds to the overall cost. If we adopted a system that paid each person's costs directly rather the current system we would save money.

One other thing that needs to be discussed is end-of-life issues. (Let me state emphatically that I am NOT SUGGESTING EUTHANASIA. THAT IS WRONG IN ALL CASES.) What I am referring to is continued aggressive treatment when little or no hope exists for success. Sometimes families or individuals request heroic treatment that prolongs life for a week or two, at expeses that sometimes run to hundreds of thousands of dollars. Individuals and families should discuss their wishes, and those wishes should be carried out at the end of life. Treatments with low possible success rates need to be chosen very carefully and thoughtfully.

Posted by: lolson1 | May 13, 2009 1:14 PM | Report abuse

The underlying entanglement with the healthcare reform efforts has to do with the food lobby. The addictive properties of the salt/fat/sugar combo is out in the open now along with the food industries complicity in foisting such unhealthy fare upon the public. The cost of treating preventable conditions related to being over-weight/obese, for example, is staggering and preventable.

Somewhere along the line the marketing of delicious, prettily packaged poison (McDonalds, twinkies, ice cream, fritos, soda pop, pizza etc.) became a hallmark of American consumer culture.

The point is that reforming health insurance has repercussions reaching into the core of the lifestyles for the vast majority of Americans. At some point we as a people will need to shed some long held concepts of the dietary/nutritional/mental health nexus. Ultimately, we really are what we eat.

Posted by: PatD1 | May 13, 2009 1:34 PM | Report abuse

If Congress had EVER given a damn about the middle class, retirees wouldn't be in the fix they're in now.

But as always, Congress puts big business first. As long as their masters in the CEO offices get theirs and pay off congress with a percentage of it, that's all congress cares about.

That's why I'm never going to vote in any national election ever again. They're ALL the same. CRIMINALS.

Posted by: solsticebelle | May 13, 2009 2:50 PM | Report abuse

In a few billion years the sun is going to burn out. THAT'S the problem that Pete Petersen and the Republicans should be working on.

Posted by: dickdata | May 13, 2009 5:41 PM | Report abuse

Dan,

What I'd like to know is why we continue to let them get by with calling SS an "entitlement" program? It's NOT an entitlement, which implies something like welfare. We have all been paying into it for years! IT'S NOT AN ENTITLEMENT PROGRAM, it's an insurance ans savings plan.

Posted by: joyousMinn | May 13, 2009 11:08 PM | Report abuse

If you are uninsured and does not have insurance, you should check out the website http://UninsuredAmerica.blogspot.com - John Mayer, California

Posted by: johnmayer76 | May 15, 2009 4:54 AM | Report abuse

If you are uninsured and does not have insurance, you should check out the website http://UninsuredAmerica.blogspot.com - John Mayer, California

Posted by: johnmayer76 | May 15, 2009 4:54 AM | Report abuse

Hey, I thought the name of this screed is "WHITE HOUSE WATCH". Why don't you watch the White House??

Maybe you can do a swoon piece about Mrs BO's naked, skinny arms like the rest of the Obamaton media.

Something useful, you know?

Posted by: battleground51 | May 15, 2009 1:40 PM | Report abuse

It is estimated that Obama's plan could benefit 8 to 9 million homeowners from the new modification procedures. So how do you know you qualify for the Mortgage Modification? Check the website http://obamamortgage2009.blogspot.com/
to see if you qualify. I was also in trouble and I am glad I did check it before I talk to my mortgage company and it helped - John Mayer, California

Posted by: johnmayer76 | May 20, 2009 6:27 AM | Report abuse

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