Wednesday, May 13, 2009
Take me back to 1995!
When Republicans took control of Congress back in 1995, dozens of serious Medicare-reform proposals were introduced ... and all of 'em were rejected, with extreme prejudice, by the Clinton Administration. "Tain't nothing with Medicare!" President Bill Clinton said; and then Clinton, at the direction of Dick Morris, allowed America's airwaves to be saturated with ads that alleged that then-House Speaker Newt Gingrich and then-Senate Majority Leader Bob Dole were going to put the kibosh on the Medicare program. (Remember those "Medicare will soon die on the vine" TV ads, in which the Dems used a five-second, out-of-context quip from Newt? I sure do.)
In 2004, President George W. Bush, with a pocket full o' "political capital," endeavored to reform Social Security. He stated that he wished to emulate Chile's uber-successful public pension program, which allows for a small portion of citizens' monies to be invested in carefully-watched, and conservatively-managed, equity and bond funds. "He's gonna privatize Social Security!" most every elected Democrat, and virtually every liberal blogger, exclaimed. And any and all discussion of serious Social Security reform went right out the fuckin' door, never to be heard o' again (or at least not until we have another Republican president).
Fast forward to 2009 ...
Yesterday the Social Security and Medicare Trustees released their annual reports. The Washington Post provides decent coverage.
Social Security took a double hit: First, the recession lowered payroll tax revenues; second, higher projected life expectancies will mean more seniors collecting benefits. The first payroll tax deficits shifted from 2017 to 2016 while the trust fund’s exhaustion date moves from 2041 to 2037. The biggest change, however, was less reported: Social Security’s total long-term deficit increased by 18 percent, a massive shift.
The Social Security report also showed no Cost of Living Adjustments will be paid from 2010 through 2012. Rising energy prices boosted inflation last year, but the CPI has fallen since then. When inflation is negative, no COLA is paid. Seniors groups are squealing that Congress should pay a COLA anyway. But if inflation is negative and benefits stay the same, the real purchasing power of benefits increases. Seniors groups know this, but they want another increase on top.
The Medicare report showed the system’s trust fund running out in 2017, a two-year shift forward. Administration officials latched onto these findings to promote their health-care reforms, saying that private-sector health-care inflation is what’s driving up costs for Medicare. HHS Sec. Kathleen Sebelius argued that the best way to strengthen Medicare's finances is to "fix what's broken in the rest of the health-care system." But as this chart from Obama’s budget shows, the main entitlement cost driver over the next 40 years isn’t health-care inflation, but simple population aging — more retirees collecting Social Security, Medicare, and Medicaid benefits, fewer workers supporting them. But population aging is a problem peculiar to government programs, which focus on seniors, and you don’t need to nationalize health care for working-age Americans to fix that.
As much as Americans have feared global Communists and anti-democratic regimes over the years, I fear that historically misguided, and chronically under-funded, federal programs like Medicare and Social Security pose the greatest existential threat to our Republic.
People retire and they expect "free" income, via Social Security. The same folks also expect "free" health care, via Medicare. Soon there ain't gonna be no money for either Social Security or Medicare. What's gonna happen then?!
Too bad we can't go back to 1995 and do what needed to be done then, and still needs doin' now ...!
In 2004, President George W. Bush, with a pocket full o' "political capital," endeavored to reform Social Security. He stated that he wished to emulate Chile's uber-successful public pension program, which allows for a small portion of citizens' monies to be invested in carefully-watched, and conservatively-managed, equity and bond funds. "He's gonna privatize Social Security!" most every elected Democrat, and virtually every liberal blogger, exclaimed. And any and all discussion of serious Social Security reform went right out the fuckin' door, never to be heard o' again (or at least not until we have another Republican president).
Fast forward to 2009 ...
Yesterday the Social Security and Medicare Trustees released their annual reports. The Washington Post provides decent coverage.
Social Security took a double hit: First, the recession lowered payroll tax revenues; second, higher projected life expectancies will mean more seniors collecting benefits. The first payroll tax deficits shifted from 2017 to 2016 while the trust fund’s exhaustion date moves from 2041 to 2037. The biggest change, however, was less reported: Social Security’s total long-term deficit increased by 18 percent, a massive shift.
The Social Security report also showed no Cost of Living Adjustments will be paid from 2010 through 2012. Rising energy prices boosted inflation last year, but the CPI has fallen since then. When inflation is negative, no COLA is paid. Seniors groups are squealing that Congress should pay a COLA anyway. But if inflation is negative and benefits stay the same, the real purchasing power of benefits increases. Seniors groups know this, but they want another increase on top.
The Medicare report showed the system’s trust fund running out in 2017, a two-year shift forward. Administration officials latched onto these findings to promote their health-care reforms, saying that private-sector health-care inflation is what’s driving up costs for Medicare. HHS Sec. Kathleen Sebelius argued that the best way to strengthen Medicare's finances is to "fix what's broken in the rest of the health-care system." But as this chart from Obama’s budget shows, the main entitlement cost driver over the next 40 years isn’t health-care inflation, but simple population aging — more retirees collecting Social Security, Medicare, and Medicaid benefits, fewer workers supporting them. But population aging is a problem peculiar to government programs, which focus on seniors, and you don’t need to nationalize health care for working-age Americans to fix that.
As much as Americans have feared global Communists and anti-democratic regimes over the years, I fear that historically misguided, and chronically under-funded, federal programs like Medicare and Social Security pose the greatest existential threat to our Republic.
People retire and they expect "free" income, via Social Security. The same folks also expect "free" health care, via Medicare. Soon there ain't gonna be no money for either Social Security or Medicare. What's gonna happen then?!
Too bad we can't go back to 1995 and do what needed to be done then, and still needs doin' now ...!
# posted by Joltin' Django @ Wednesday, May 13, 2009 
