President Barack Obama’s decision to put Social Security and Medicare benefits on the negotiating table in budget talks with Republican leaders makes sense politically.
It’s expedient; it’s pragmatic — and it’s indefensible.
Social Security and Medicare account for more than a quarter of all federal spending, and costs are growing rapidly. One of every four Americans was born in the “baby boom” that followed World War II, which means 76 million Boomers are becoming eligible for what liberals refer to as “earned benefits” and what conservatives commonly describe as “entitlements.”
Medicare, in particular, is in jeopardy. Without reforms, it faces insolvency within a dozen years.
Most experts believe Social Security could be shored up with common-sense tweaks such as eliminating benefits for the very rich and raising the earnings cap. An executive with a salary of $250,000 a year, for instance, pays Social Security payroll taxes on $113,700, while the remaining $136,300 is exempt.
Republicans have demanded entitlement reforms as part of any long-term answer to a national debt that is approaching $17 trillion.
Obama yielded to these demands in his new budget. He proposes raising the eligibility age and premiums for Medicare. He also recommends reduced benefits for better-off seniors.
With Social Security, he supports a new formula for calculating cost-of-living adjustments. The approach is called “chained CPI” — consumer price index — and its proponents argue it is a more accurate gauge of inflation.
While this may be true for society as a whole, it does not reflect the reality for seniors who
spend a larger share of their incomes on health care and thus have greater exposure to the ravages of inflation.
If chained CPI is adopted, the average Social Security recipient who is 65 today will lose an estimated $650 a year in income by age 75. A typical single elderly woman living on $18,000 a year would lose $6,000 in total benefits by age 85.
Half of America’s seniors struggle to make ends meet on incomes of $22,000 or less a year. They have not received Social Security cost-of-living adjustments in two of the past four years.
Obama would ask these people to get by with less income even as they spend more for premiums, co-pays, deductibles and out-of-pocket medical costs.
Who thinks this is a good idea, Mr. President?
— THE TIMES HERALD (PORT HURON)