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The sacred cows of the Democratic Party — Social Security and Medicare — have unacknowledged blemishes so severe that they promise increasing unfairness to each younger generation of Americans. A Social Security-Medicare trustee explains how in a revealing scholarly paper. The revelation was published by the Hoover Institution Aug. 26.
Charles Blahous, a Hoover research fellow, is one of two public trustees for the Social Security and Medicare programs. A PhD from University of California at Berkeley and a graduate of Princeton, he has specialized in domestic economic policy, retirement security issues, and federal fiscal policy as well as demographic change and health care policy.
The latest (2011) report of the boards of trustees states that the “financial conditions” of the two huge programs “remain challenging.” Projected costs for both programs “are not sustainable under current scheduled financing,” the 2011 report says. But it doesn’t tell the whole story.
Trustee Blahous observes, “The national discussion on entitlement programs is dazed and confused.” Our two largest programs “are at the center of a vibrant national debate over our fiscal future.” No confusion exists for the muddle-headed House Minority Leader Nancy Pelosi. She has memorized well the continuing cry from the Left. As she has said repeatedly: “We are not going to balance the budget on the backs of America’s seniors, women and disabled.” Whatever that means.
Hair-brained columnist Froma Harrop says, “No one’s saying that Social Security can’t be slightly recalibrated to keep the program on a sound footing or that significant savings can’t be found in Medicare waste.” Oh, so simple.
But Blahous opens a bundle of truths to correct ideas and decisions that have been made “unnecessarily difficult by rampant confusion” about each program. One deceptive myth, he writes, is that we “only” have a healthcare financing problem, not a population aging or senior entitlement problem. Unlike many myths that arise from “public ignorance, this damaging myth gained currency” by being pushed by several “influential policy advocates.”
Everyone has long understood that the baby boomer generation would create huge financial challenges when they switched from taxpaying workers to Social Security and Medicare beneficiaries. Expenditures would soar. But as Bush left office and Obama entered, many Washington policy wonks “began to sing a different tune. Suddenly population aging wasn’t such a big deal…The entire fiscal shortfall was due…to healthcare alone.” Proponents of this new line included leaders from Brookings Institution, the AARP, and the then-head of Obama’s Congressional Budget Office, Peter Orszag. CBO published a “controversial chart purporting to show” that health care “utterly dwarfed” population aging as the contributor to long-term fiscal imbalance.
This gave Obama the opportunity to claim, “Healthcare reform is entitlement reform.” This thinking took politicians off the hook for tough action on benefits and eligibility. Here was a rationale for doing what politicians love to do—expand benefits and damn the cost. Voila! ObamaCare.
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