Time to reform U.S. entitlement programs

Social Security and Medicare/ Medicaid reform have so far received little attention on the presidential campaign trail. That needs to change. Social Security provides half or more of total income to the majority of Americans over age 65, and Medicare/Medicaid provides coverage for more than 50 million seniors and people with disabilities. This year, 169 million workers will pay Social Security payroll taxes, yet trustees warn that the fund may become insolvent in 2035 if reforms are not made. Although Social Security has serious fiscal problems, they are minor compared with Medicare’s funding problems.

There are stark differences between the philosophies on entitlements espoused so far by Donald Trump and Hillary Clinton. Seniors had better take notice; their wellbeing is at stake.

Trump takes a populist position on reform. Opposing Republican colleagues who favor privatizing Social Security, Trump supports raising the retirement age and cutting benefits. Trump said he will save Social Security by creating more jobs, cutting taxes and stimulating the economy. This will require him to engage with Congress and garner bipartisan cooperation to shore up support for a comprehensive tax reform plan that simplifies personal income tax, lowers the rate of corporate taxes and eliminates the alternative minimum tax and inheritance tax, among others. This will be a hard sell to Democrats in Congress.

Trump also indicated that although he opposes cuts to Medicare, he strongly supports repealing the Affordable Care Act. Dismantling the law, he says, would help reduce the federal deficit and remove waste, fraud and abuse in Medicare and Medicaid. He points to a “pro-growth” agenda, the centerpiece of which is an expanded tax base, to make Social Security financially sound for all age groups and future generations. However, the Affordable Care Act allows 39 million Medicare beneficiaries to receive preventive services with no cost-sharing, and 9.4 million people saved more than $15 billion in prescription drug expenses, according to the Department of Health and Human Services. Trump has not mentioned providing current beneficiaries with replacement coverage.

Although much of Clinton’s agenda focuses on helping middle-class families prosper, her commitment to protecting Social Security is strong. She opposes reducing annual cost-of-living adjustments and any efforts to raise the retirement age to 70, similar to Trump. She also wants to expand Medicare to improve access to services. This includes expanding insurance regulation of dramatic prescription drug price increases and opposing any attempt to repeal the Affordable Care Act.

But perhaps one of the biggest points of distinction defining the candidates regards expanding Social Security, which is a position favored by 61 percent of the American people, according to an NBC News/Wall Street Journal poll. Clinton believes expansion is necessary for the most vulnerable and for those who are treated unfairly by the current system. She focuses particularly on protecting the adequacy of Social Security benefits for women when a spouse dies. Currently, widows take a deep cut in benefits, and those who provide care-giving responsibilities often have an uneven paid work history, thus affecting their lifetime Social Security contributions. Clinton intends to have higher earners pay more into the system, but she is noncommittal about how to do this.

It is unlikely that either candidate will endorse sweeping changes in Medicare and Social Security, and both want to ensure that Social Security and Medicare provide adequate benefits to meet the needs of future retirees without creating an unrealistic and heavy financial burden on the present and future working-age population.

But changing these programs will have consequences for the well-being of all Americans. Both candidates will need to convince younger Americans that entitlements should be reformed. Both candidates should share their plans on how to make Social Security and Medicare financially sound now and for future generations. This issue is critical, and must be addressed.