Social Security, Medicare badly need reform

I have often wondered why policymakers in Washington repeatedly fail to seriously address problems with our Social Security and Medicare programs, despite repeated warnings by economists and the programs’ administrators that the programs will begin spending more than they take in by the end of the decade.

Then I wrote a column advocating entitlement reform. Now I get it.

Given the many strongly worded responses I received, I have a better understanding, at least on some very small scale, what politicians are facing when they so much as whisper the words “Social Security” and “Medicare” in the same breath as the word “reform.”

Indeed, the topic truly is the third rail of Americans politics.

In a recent column, I explained how President Donald Trump’s promise to make “no changes” to Social Security and Medicare was going to be a problem, given the programs’ trajectories.

I assumed, perhaps incorrectly, that fixing these programs so they serve the populations that rely upon them and are around for future generations is a largely uncontroversial idea _ especially when so many Americans are concerned about federal debt.

Then a piece about entitlement spending written by my favorite economist and Washington Post columnist, Robert Samuelson, reminded me of something very important: public opinion “is awash in contradictions.”

My inbox quickly filled with diatribes like this one: “Entitlement (expletive), it’s our money,” and lawmakers “robbed (the trust fund) and (it) is owed what was taken from it and to be given back with interest,” and “you’ll be old some day.”

First off, I find it astounding that anyone would trust the government to “return” to us money that it siphons out of our paychecks each month.

I doubt lawmakers ever met a dollar they didn’t promptly spend.

Even if we assume the government holds our money for safekeeping while we age and pays us back with interest, studies show average Social Security and Medicare payouts are significantly higher than what recipients paid in via taxes.

The Urban Institute, a nonpartisan think tank, estimated that contingent upon income and lifespan, the average Social Security and Medicare benefits for a couple can be as little as three times their investment and as much as 14 times what they paid in.

While many people contend the monies are in a “trust fund,” they aren’t. Most revenues are paid out to current beneficiaries, while the government and future workers are left with an IOU to cover the next generation of beneficiaries.

And the shrinking workforce means that won’t be possible at current levels much longer, meaning future generations can’t depend on the programs.

In my column, I did not advocate any particular policy changes, but I am not aware of any that call for changes to the benefits of current and near-term beneficiaries. So the angry diatribes of seniors, or near-seniors, are entirely misplaced.

Most proposals suggest modest changes, like means testing or raising the retirement age for Americans still years away from retirement, which are reasonable given the nature of the problem.

No Labels, a bipartisan policy organization headed by former Utah governor Jon Huntsman and former senator Joseph I. Lieberman, has made Social Security and Medicare reform one of its top policy priorities. It advocates higher payroll taxes, among other policy tweaks, to help shore up Social Security.

This wouldn’t impact current seniors.

As to the repeated critique by many readers that calling Social Security and Medicare entitlements is a misnomer, I understand the objection.

In his column on entitlement spending, Samuelson suggested we “drop the whole notion of ‘entitlement.’ Just eliminate it. ... This would encourage clarity and candor,” and force politicians to name specific policy programs.

He then added that “it won’t happen. Generally, Americans don’t want clarity and candor in their fiscal debates.”

Call it whatever you want, reform needs to happen.

And lawmakers must risk the deluge of nasty emails and phone calls and start talking about it more.