Email
“Spending on the elderly is slowly and inexorably crowding out the rest of government – and creating enormous pressures for future, steep tax increases,” declares Robert Samuelson (Journal column on Feb. 17). This is vintage Samuelson. Every week he preaches that we must cut Social Security and Medicare or face economic catastrophe.
Is he right? Must we drastically cut these programs that have been so important to the security and health of our older citizens? Do we really have to choose between preserving these benefits and the economic survival of our country?
No! If we take sensible steps over the next few years, these programs can be preserved, no doubt with some reasonable adjustments as needs change.
First and foremost, believe it or not, Social Security is in fundamentally good shape. In the 1980s Congress made changes that anticipated the baby boomers and fully funded the payment of unchanged benefits until 2036. After that, benefit reductions can be avoided if we phase in modest changes soon, like increasing the cap on earnings subject to the Social Security tax and phasing in a modest rate increase.
Reducing Social Security benefits should be off the table. The average beneficiary gets only about $14,000 per year – and for a majority of retirees, that’s all they have to live on. Talk of delaying the retirement age is fine for lawyers and doctors, but not for the majority of people who have spent their lives working at physically demanding jobs.
Second, we should let all the Bush tax cuts expire over the next few years. This step alone would go a surprisingly long way toward eliminating runaway deficits and would permit us to avoid drastic cuts in the other government programs that Samuelson claims to be worried about (like education, scientific research and rebuilding our infrastructure).
The public was opposed to the Bush tax cuts when they were enacted, and it turns out they were right. These cuts have added about $3 trillion to the national debt, mostly for the benefit of the upper classes. Why not let federal taxes gradually rise back to the levels of the 1990s – a time of strong growth and prosperity when no one was complaining about excessive tax rates?
Third, we need to get a grip on the growing costs of our health care system. Rising costs of Medicare and Medicaid reflect system-wide increases. Actually, their costs per person have been growing less than the rest of the system. To control the costs of these programs, we must correct the underlying inefficiency of American health care. Health care in the U.S. costs twice what it does in other industrialized countries, with no better results.
Fortunately, the latest data show that health care cost increases have slowed over the last decade. The Affordable Care Act contains numerous approaches to further restrain spending, such as negotiating drug prices, promoting electronic health records and coordinating care to keep people healthier and avoid unnecessary tests and procedures.
We cannot just cut Medicare and Medicaid and force the elderly and disabled to handle medical cost increases all by themselves. For example, the Republican plan to change Medicare to a voucher would cost beneficiaries an average $6,000 more per year. Retired Americans cannot afford this. To preserve Medicare, we must save money by reducing the inefficiency in our entire system.
Even with improved efficiency, health care costs will rise over time as new drugs, devices and procedures are discovered that bring us longer and healthier lives. But I don’t think anyone will begrudge paying more of our national income for medical care – both public and private – if we are getting demonstrably better treatment and not wasting so much money.
Samuelson is wrong to suggest that we have to choose between a decent society and a prosperous society. If we take the reasonable steps suggested above, we can keep our promises to the elderly, maintain spending on other important priorities and have a growing future economy.
Nick Estes is a retired university counsel for the University of New Mexico.
