Tuesday, February 15, 2011

How to reduce Social Security and Medicare--AND be re-elected

Everybody is noticing that the rival Democratic and Republican budget plans both skip over the plumpest targets for savings: Medicare and Social Security.   And for the best political reason possible--such cuts are extremely unpopular with voters.    Republicans have attempted such cuts many times over the last few decades--1981, 1986, 1995, 2005--and each time have been knocked back.  And Democrats who favor such cuts all seem to have one common characteristic: they do not hold elected office.   
Practicing politicians, eyeing their own re-elections, have gotten the message; the “third rail” is still the third rail.  Indeed, according to a November poll, by an 81:18 margin, voters would rather raise taxes than cut Medicare. For Social Security, the results were nearly identical--78:21.

Those are daunting numbers for even the hawkiest deficit-hawk.    Courage is virtue, but courage that amounts to guaranteed political suicide is a rare virtue--especially when there’s no chance that President Obama will agree to such cuts between now and the 2012 re-election.   Democratic politicos are not going to let their president throw away a perennial winning issue--“Save Social Security and Medicare”--for the sake of making Paul Ryan or Pete Peterson happy.  But then, of course, come the equally crucial 2014 elections, and the 2016 elections, and on and on.  

So is the situation hopeless?  Are we doomed to slide down into Greece City?  Let’s hope not. Better yet, let’s match that hope with some new thinking.  Let’s make the voters a better offer: If we can cure Alzheimer’s Disease (AD), or even push back its onset by five years, then we can cut entitlements.   Instead of cutting the supply of money to Social Security and Medicare, let’s try cutting the demand--fewer incapacitated oldsters.   Would Democratic politicos join up with the professional leftists at AARP to fight such a raising of the retirement age?   Maybe.  But they would lose to rank-and-file seniors, and future seniors, who want to know their grandchildren.    

A “moonshot” approach to AD would require much more than more NIH funding.  The mobilization needed would necessitate reform of the FDA, of product-liability and intellectual property laws, and new mechanisms for leveraging private capital.   That’s a lot of work, but at least that approach would offer the hope of real entitlement savings that the voters would accept, as well as better health for all of us.  


  1. You say “such cuts are extremely unpopular with voters”
    I don’t think so Jim and I’m a Senior. I agree, don’t cut Medicare ........ annul Obamacare first. Then lets see.

    As for Social Security, it’s long overdue for an increase in age eligibility. Life expectancy in 1936 was 56.6 for men. In 1998 it was 73.8.
    Now I’m not suggesting early retirement be moved from 62 to 73. How about 68? And full retirement at say 73?
    But SLIDE into those new retirement age brackets with those people who are say 38 years old? I wonder what their age expetancy will be in 2041?

    Don’t salary cap the SS tax (FICA) let it go all the way up into the realms of what those bankers earn, including their bonuses which BTW are only now taxed at 15%! However, cap the corporation’s contribution to where it is now, $106,800.

    Yes cutting the demand by curing AD is a good thing.
    But reform of the FDA? You gotta be kidding. We, need a President to put Donald Trump in charge of it. Then give him an ax and a license to kill the “lard cans.” ;-)
    Hey, maybe I’m on to something? Trump for President?
    You never know. What I do know is that We the People are very tired of the “Hill People” who only show their “Acorns” when it comes to asking for political contributions.

  2. This is absolutely brilliant guidance. I am really thankful to you for that. All possible solutions to this problem have been discussed are unacceptable for many people, but some are more unpopular than others.