THIS week produced somber warnings about the long-term viability of Social Security and Medicare. So what else is new?
What we heard from trustees who oversee Social Security — that trust funds supporting the retirement program could dry up in 2033, three years earlier than previously expected — was little more than a variation on a theme that has been repeated many times through the years. What will be repeated, too, is Congress' response. Expect more whistling past the graveyard.
In May 2006, Medicare and Social Security trustee Thomas Saving said flatly: “Either government is going to have to be a lot smaller, or these programs are going to have to be dramatically changed.” A year earlier, after winning election to a second term, then-President George W. Bush had offered a Social Security overhaul that would have allowed seniors to voluntarily opt out of the program for one of safe private investments. It went nowhere on Capitol Hill.
So have any subsequent talks about reforming these entitlement programs, because most politicians are scared to death of the potential political fallout. One exception is Sen. Tom Coburn, R-Muskogee, who has been screaming from the mountaintops that changes must be made. Coburn has endorsed the idea — raising the early retirement age and the full retirement age for Social Security and reducing benefits for the wealthiest workers. The plan wouldn't affect those now receiving benefits or those about to retire, and yet it has gained zero traction.
Another who grasps the pending fiscal train wreck that awaits without entitlement reform is U.S. Rep. Paul Ryan, R-Wis., whose Republican budget plan would — for those younger than 55 today — switch Medicare from the current “fee for service” system in which the government pays medical bills to a premium support system in which the government subsidizes health insurance purchases. Pandering Democrats have assailed that idea at every turn.
Yet Democrats are among those issuing the latest warning about Social Security and Medicare. The trustees who oversee the programs include Treasury Secretary Timothy Geithner, Labor Secretary Hilda Solis and Health and Human Services Secretary Kathleen Sebelius.
“Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare,” the trustees said in their report Monday. “If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare.”
Geithner called Social Security and Medicare “the twin pillars of retirement security in this country.” But those pillars are crumbling and have been for a long while. There's no reason to think this latest warning will spur a call to action — certainly not with a presidential election looming.
Last year, New York Times columnist David Brooks pointed out that 47 percent of the federal budget was devoured by spending on Social Security, Medicare and Medicaid plus interest on the national debt. By 2020, Brooks said, it is expected to be 64 percent. Ten years after that, it will be 70 percent. The clock on this time bomb continues to tick.