Now that the debt ceiling fight is over, officials in Washington are turning their attention to the next round of budget cuts.
On the table this time: Entitlements, the social programs that include Medicare, Medicaid, and Social Security. Together, the three programs comprise the biggest part of the federal budget, consuming more than 40 percent of the budget ï¿½ a share thats expected to increase as Americas population ages.
Should the programs be slashed or saved? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue.
Slashing entitlements isnt just a bad idea, politically. Its also unnecessary.
Social Security faces a shortfall, yes, but its manageable and the most effective fix is easy: Raise taxes on the rich.
Right now, nobody pays Social Security taxes on income above $106,000.
One estimate suggests removing that cap would wipe out half the programs projected shortfall ï¿½ making it a no-brainer. Other proposals, such as adjusting the formula of cost-of-living increases, would preserve Social Security benefits without major disruption.
Medicare is trickier. Its costs are destined to rise as the Baby Boom generation moves into retirement, with a half-million new enrollees expected every year for the foreseeable future.
But Wisconsin Republican Paul Ryans plan to let private insurers cover elderly Americans is a bad idea. Medicare has proved more effective at controlling growing health costs than the private sector ï¿½ and Ryans plan would force income-poor seniors to shoulder an ever-heavier burden of the cost. The Center for American Progress suggests wed all be better off by continuing improvements to Medicares cost-control mechanisms.
Despite the Tea Partys ability to dominate todays discourse with talk of austerity, Americans dont want to see changes to the big three programs. A recent poll from Pew Research Center shows 60 percent of respondents want to keep Social Security and Medicare exactly as they are, and that 58 percent dont want low-income recipients to have Medicaid benefits taken away. A Kaiser Health Tracking Poll shows 59 percent want no reductions in Medicare.
Americans like the safety net, and politicians would be wise to heed that fact.
Of course, Americans generally dont like tax hikes either. But federal tax rates right now are at their lowest in living memory ï¿½ and among the lowest in developed nations. If we want the safety net, we should be willing to pay for it. And we can.
Entitlement reform is boring. The dollar figures involved simply do not resonate with most Americans. Tens of trillions of dollars in “unfunded liabilities?” Gargantuan fractions of the nations gross domestic product sucked up by debt? Who can wrap his mind around the enormity of it all? It makes your teeth hurt.
But thats just it. Entitlement reform is boring and mind-boggling, but its also essential to the survival of the republic.
Fact: Medicare and Medicaid spending rose 10 percent in the second quarter of 2011 from a year earlier to a combined annual rate of almost $992 billion, according to the Bureau of Economic Analysis (BEA). The two programs are likely to crack $1 trillion before the end of the year, the BEA number crunchers say. Medicares unfunded liability alone amounts to $353,350 per U.S. household.
Thats like buying a second home in California. And nobody is buying houses!
Another fact, more terrifying than the last: U.S. debt increased $238 billion to reach 100 percent of GDP after President Obama signed the bill lifting the governments debt ceiling, the U.S. Treasury Department reported Wednesday. Were in the same boat as Italy, steaming toward Greece.
And, sorry, taxing the rich wont get us out of this mess. For starters, we dont have enough rich people to soak. The Congressional Budget Office ran the numbers and found that raising the top two rates by one percentage point would yield just $115 billion over 10 years.
Even President Obamas tax-the-rich scheme would reduce the federal budget deficit (as opposed to the debt) by a measly $1 trillion over 10 years.
The New Deal and the Great Society made certain promises to Americans about taking care of the poor, the sick, and the elderly. Those promises took generations to fulfill ï¿½ and have brought the country to the brink of fiscal disaster. We need to rethink those promises and readjust our expectations. Unfortunately, we dont have the luxury of generations to do so.
Original Source: http://www.reporternews.com/news/2011/aug/04/is-it-time-to-slash-federal-entitlements/