Attacking the Social Safety Net
Sooner or later, all discussions of budget balancing and debt reduction eventually arrive at a discussion of how to address the rising costs of Social Security, Medicare and Medicaid. These programs were instituted to care for the needs of the most vulnerable members of our society – the elderly and poor, including many children. They are dependent on these programs for medical care in the cases of Medicare and Medicaid, and retirement or disability income in the case of Social Security. While Social Security was not initially designed to provide for a worker’s entire income during retirement, the demise of many pension and other retirement plans leaves many with little more than Social Security to live on in their retirement years.
Social Security and Medicare have been funded since their inception by a payroll tax on employers and workers as a percentage of their pay. There is no cap on the income taxed for Medicare, but there is a limit to the amount of one’s income that is taxed for Social Security. The rapid increase in the costs of medical care, along with increased life expectancy for people in our country, have combined to create a situation where the programs may need to face changes in order to maintain current benefit levels for all participants. Raising or eliminating the cap on wages subject to the Social Security payroll tax would go a long way towards extending the program’s fiscal viability many years beyond current projections. Social Security is not currently a budget busting program to begin with, having run surpluses for most of its existence. Further raising the retirement age for Social Security eligibility or otherwise reducing benefits paid to its recipients is neither necessary nor would it treat recipients with the respect and compassion they deserve for the years of work and tax dollars they have contributed. Raising the retirement age would affect those most dependent on the program more severely than those who are more financially secure.
Raising the payroll tax associated with Medicare, along with efforts to control the costs of health care in general could achieve similar results for that program. Some proposals have been put forth to raise the eligibility age for Medicare as well. This would definitely be detrimental to the health and well-being of increasing numbers of elderly people who would then have to obtain private health insurance at a time they could least afford it. A budget proposed by Republican Vice Presidential nominee Paul Ryan and passed by the House of Representatives would start giving vouchers to future seniors to help them purchase such insurance on the private market. Most studies of this approach have concluded that it would dramatically increase out-of-pocket health care costs for most seniors, as the vouchers would not increase fast enough to keep up with the inflation in medical costs. Again, this would cut costs to the federal government by cutting benefits to many who can least afford to pay for it.
Likewise, proposals are being put forth to reduce the costs associated with the Medicaid program by giving block grants to the states to administer under the assumption that they would then be able to spend the money more efficiently than under the current system. The Medicaid program is designed to meet the health care needs of the working poor, children and some of the elderly, particularly those in need of long-term care such as nursing homes. As health care costs continue to rise while wages do not, cutting benefits in this manner would result in more people doing without needed medical care. This is not the direction we should be moving in as a society.
After the election, there will again be increased pressure for legislators and the Administration to meet budget deficit and debt reduction goals. Taking the easy way out by simply reducing costs associated with the social safety net without regard to the effects of such methods on the welfare of those in need. Turning back the clock to the bad old days before the New Deal would be a Raw Deal to cast numbers of Americans and would only serve to benefit most those who need it least. The situation reminds me of when President George W. Bush wanted to privatize Social Security by turning it into a sort of modified 401k plan that would leave us all that the vagaries of how the stock market was faring when it came time to retire.
Lowering taxes is fine, as long as doing so does not negatively impact much larger segments of the population than it benefits. These proposals would do just that. Additional sources of revenue, not merely budget cuts, must be explored in detail to come up with solutions that are not only fair but also compassionate to those who are less fortunate in our society. This includes examining how we tax different sorts of income differently than others. Why, for instance, is wage and salary income subject to different taxes and different tax rates than capital gains are? This is one example of why folks like Mitt Romney are able to legally pay lower tax rates than the rest of us, while at the same time claiming they pay more taxes than we do. They do, but only because they can afford to do so and still increase their share of the national wealth while ours declines.
Such attacks are not new. They never seem to go away. Ever since Reagan, the general trend has been to decrease the tax burden on the wealthy by making others either pay more or do without the hard-earned benefits their work deserves. Providing fewer benefits would be a move exactly the opposite of what a compassionate society has as a goal. Single-payer universal health care would be a step in the right direction, but not these proposals. The people salivating the most over the thought of privatizing Social Security, Medicare and Medicaid are the ones who would stand to gain the most – the insurance and pharmaceutical industries and Wall Street types who would have all that extra money in the market to make fees off – not the vast majority of us.
Some seem to me intent on morphing the social safety net into something like screen doors on a submarine. Sure, they keep out the sharks, but do nothing to save the occupants from drowning. For that, they need to buy themselves scuba gear and an endless supply of air tanks. I hope people will keep these thoughts in mind as Congress goes back into session and begins anew its debate on our futures.