We often hear about the fiscal wreck that awaits Social Security and Medicare in the not too distant future. I myself have argued that there does need to be some reform. Social Security should be means tested. Someone who has a retirement income of $100,000 (or perhaps less) should not be receiving Social Security benefits while others are trying to live on a few hundred dollars a month. Yes, I know it’s their money and that the program was not promoted as insurance. But I know of at least two people in my extended family who had to survive on less than $500 a month, one whose husband worked an entire lifetime and another whose husband deserted her with two young children. That’s not right. It’s also fair to ask people to work longer in an age when people live much longer, healthier lives. I also think Social Security should tax the entire income, though I respect the argument against that, especially if we means test.
But Robert Kuttner makes the cogent argument in The Washington Post today that much of the attack on “entitlements” is an ideological attack, “dressed up as fiscal high-mindedness” with disingenuous arguments.
Social Security is financed by taxes on wages — and since the mid-1970s, wage growth has stagnated. If median wages rose with productivity growth, as they did during the first three decades after World War II, Social Security would enjoy a big surplus. Even without a raise for working America, Social Security needs only minor adjustments.
The argument that Social Security problems, minimal though they may be, are traceable to the declining incomes of the middle class is one that progressives should make ad nauseam on the talk shows. Social Security is only a problem, albeit a minor one, because we have tilted the table so far in favor of the rich.
Regarding Medicare, the problems are real but a better solution than restricting care is to reform health care more broadly, Kuttner argues.
If we just cap Medicare, needy seniors would get bare-bones care while more affluent people could supplement their insurance out of pocket. The decent cure for Medicare’s cost inflation lies in comprehensive universal health insurance so that the entire system is more efficient and less prone to inflation. You don’t hear many budget hawks supporting that brand of reform.
I would argue, from personal experience, that Medicare also suffers from well-heeled people like my mother who abuse it. She constantly worries about her health and is forever seeing doctors to get nothing but reassurance that everything is OK. She lives in an independent living situation. When she found out that Medicare would pay for someone to come to her room whenever she needs a blood test, though she is fully capable of going to the in-house clinic and saving the taxpayer money, she now asks for the in-room service. Your tax dollars at work, or more precisely, abused.
But Kuttner’s best argument is for more investment for the young. We’re not only leaving them with huge debts, but we’re cutting funding to the things they really need — education, child care and health insurance.
Child care costs have been forced upon the middle class by an economy that makes it increasingly difficult for a family to survive on one income. Again, it’s another cost that families have become “owners” of due to the economic policies that have devalued the incomes on the middle class.
But fiscal conservatives seldom call for increased investment in the young. Today’s young, of course, will be tomorrow’s retirees, and they will need social insurance, too.
Three points progressives need to argue incessantly:
1. Social Security is threatened by the decline of middle class wages.
2. Medicare reform cannot be independent of healthcare reform.
3. Shortchanging the younger generation will come back to haunt us.