STIRRETT: Long-Term Welfare Reform
A Canadian Contention
Published: Friday, April 13, 2012
Updated: Friday, April 13, 2012 00:04
From the Super Committee to the Simpson-Bowles Commission, it seems like every bipartisan effort to avoid a looming debt crisis has ended up in the garbage can.
The deficit is one of the most depressing and frustrating issues to follow in American politics because it constantly seems to be at a stalemate. Nevertheless, there is some consensus that any serious discussion of reducing the deficit must involve entitlement reform.
There should be two main priorities when thinking about entitlement reform: ensuring that the quality of benefits remains high and guaranteeing that these programs are sustainable in the long run. Too often, political figures fixate on only one of these goals and ignore the other.
Demographics should drive public policy formulation. From 2010 to 2050, the percentage of Americans who are over the age of 65 will increase from roughly 15 percent to about 25 percent, placing significant pressure on programs such as Social Security. The relative number of those depending on such programs will increase while the relative number of those contributing will decrease.
Under the current Medicare system, more than 45 million people over the age of 65 or with permanent disabilities are given insurance, usually a single-payer model of healthcare. According to the non-partisan Congressional Budget Office, Medicare will go bankrupt by 2020 without substantial reforms.
In Rep. Paul Ryan’s (R-Wis.) “Path to Prosperity Plan,” he proposes to transition Medicare to a voucher-based system by 2022. But in a recent poll, 80 percent of all Medicare recipients reported a favorable view of their healthcare coverage. Rather than scrapping a system that is clearly working, sensible reforms should be implemented that will make Medicare sustainable in the long run.
The problems related to the spiraling costs of Medicare connect to broader trends in the American health care system. More needs to be done to address issues such as skyrocketing medical malpractice expenses and rampant Medicare fraud. These larger issues help explain why health care costs for American families have nearly doubled over the past decade. Addressing these issues and looking into the potential of tax increases as well as higher premiums can ensure that Medicare remains intact for future generations.
Social Security is another major issue that needs to be addressed, and my fellow columnist Sam Dulik (SFS ’13), author of “Quorum Call”, presents some laudable proposals. However, he looks at only part of a much larger deficit problem.
Medicare and Social Security are parts of a far more comprehensive puzzle. The United States is running a federal deficit that is extremely unsustainable. The federal budget is growing at a rate that is four times that of GDP. According to the Congressional Budget Office, the debt-to-GDP ratio could increase from 70 percent in 2011 to 190 percent in 2035.
The only way to fix this spiraling debt is to embrace true fiscal conservatism, which means balanced budgets, not necessarily low taxes. The reality is that under President Bush, significant tax cuts were pushed through while spending was substantially increased.
Large constituencies of both parties support a similarly sized government. The difference is that Republicans will not increase taxes or cut spending, delivering the bill for current deficits to future generations.
Like the Simpson-Bowles Commission recommended, moderate tax increases should be part of any solution to eliminate the deficit. Much of the opposition to tax increases can be traced to conservative lobbyist Grover Norquist’s “no new taxes” pledge, which has been signed by all but four Republican members of the House of Representatives. Circumstances can always change in domestic politics, and making a pledge that prevents the possibility of compromise is deeply irresponsible.
The federal deficit presents a grave challenge to the United States. Even in light of this ballooning deficit, programs such as Medicare and Social Security must be protected for future generations of Americans through a mixture of policy reforms, including potential tax and fee increases.
For too long there has been the false assumption that in order to support eliminating the budget deficit, one must be a fervent supporter of cutting entitlements benefits. Through flexible thinking and pragmatic policies, the United States can avoid an impending federal budget crisis while maintaining the quality of entitlement programs.
Scott Stirrett is a junior in the School of Foreign Service. He is the former chief of staff of the Georgetown University College Democrats and former chair and co-founder of D.C. Students Speak. A CANADIAN CONTENTION appears every other Friday.