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A Dozen Budget Wishes for Congress

November 01, 2013

By Diana Furchtgott-Roth

This week saw the start of budget negotiations between the House of Representatives and Senate. But as Republicans and Democrats sit down together less than a month after a government shutdown, will the two sides be able to find common ground? Global Public Square asked 12 commentators, analysts and policy makers for their take on what Congress should be discussing – and what an agreement should include. All views expressed are the writers’ own.

My one wish for budget negotiations is long-term reform of Social Security and Medicare. Let seniors keep current benefits, but alter the programs for those who retire in 2023.

Young people are bearing the burden of paying for rapidly-growing Social Security and Medicare programs – even though the programs will go broke before the young can use them. Passing on these costs to the young, who have higher unemployment rates, more debt, and fewer assets, is the height of unfairness.

The Congressional Budget Office projects Medicare costs to rise from 3.6 percent of GDP in 2012 to 5.6 percent in 203. Social Security costs are due to rise from 5.1 percent in 2012 to 6.2 percent in 2035. The retirement age for Social Security therefore needs to be gradually raised, and the indexing of benefits changed to reflect a more accurate level of prices in the economy rather than wages.

Medicare, a tougher nut to crack, needs to be reformed through ccompetition, which has lowered prices for Lasik eye surgery and cosmetic procedures.

One way to inject competition into Medicare is premium support, which works like the popular Federal Employees Health Benefits Program. Seniors should be allowed to choose from a variety of government-approved competing health insurance plans, at different prices with different levels of service. Richer seniors would pay more.

Plans could include high-deductible options carrying lower premiums combined with health savings accounts, or more traditional managed care or fee-for-service plans.

Social Security and Medicare cannot keep their promises to future seniors and the young are being asked to shoulder an increasing share of the costs, without hope of a return. Effective budget negotiations must include alternatives.

Original Source: http://globalpublicsquare.blogs.cnn.com/2013/11/01/a-dozen-budget-wishes-for-congress/

 

 
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