Monday, February 23, 2009

Sometimes Screaming Works

Both Ruth and I, along with many other bloggers, have been pointing out that the last thing President Obama and the 111th Congress needs to do is mess with Social Security. Ruth pointed out yesterday that to refer to Social Security as an "entitlement" is to frame the argument in favor of those conservatives who see the program as a give-away to the ne'er-do-wells who weren't smart enough to save for retirement. It also ignores the fact that people like Ruth and I have been paying into Social Security for over 40 years. We willingly participated in the insurance policy because we knew those premiums would be used to protect the generation before us. We counted on the next generation to do the same for us, and they are.

Social Security is not broken. Even the direst of forecasts shows complete solvency for at least 30 more years, and that's without cutting benefits or raising the cap on payroll payments into the fund. Why is President Obama even thinking about Social Security as a troubled program?

Apparently he is beginning to change his thinking, and that is a hopeful sign.

Mr. Obama considered announcing the formation of a Social Security task force at a White House “fiscal responsibility summit” that he will convene on Monday. But several Democrats said that idea had been shelved, partly because of objections from House and Senate leaders.

The president signaled in his campaign that he would support addressing the retirement system’s looming financing shortfall, in part by applying payroll taxes to incomes above $250,000. But that would ignite intense opposition from Republicans, especially with the economy deep in recession.

Liberal Democrats are already serving notice that they will be equally vehement in opposing any reductions in scheduled benefits for future retirees. But any solution, budget analysts said, must include a mix of both approaches, though current beneficiaries would see no change. ...

Social Security still runs a surplus, and its reserves will not be exhausted until 2041, after which enough payroll taxes will come in to cover 78 percent of benefits, according to the 2008 annual report of the program trustees. Medicare, by contrast, requires big infusions from general revenues each year; its hospital trust fund is already running annual deficits and will be exhausted by 2019.
[Emphasis added]

Unnamed budget analysts be damned: there is no reason to cut benefits. There may be a good reason to lift the cap above its current levels at some point down the road, but, again, this program is not broken. I think what worries our congress critters on both sides of the aisle is that program's surplus won't be available to tap into the next time some glorious bit of pork begins to interest them.

That said, however, I do recognize that Medicare and Medicaid programs are in trouble and do need attention, but that attention shouldn't be couched in terms of cutting benefits to those who need and deserve them. Health care costs in general should be a priority for this administration. That is not the same thing as real benefits.

One area that needs some focus is that of Medicare fraud. Ronnie Bennett had an an excellent post on the issue just last week. If the federal authorities went after the fraudsters in durable medical equipment and the cappers who take advantage of gullible elders the way the last administration went after "voter fraud," we could save at least a billion or two annually for the Medicare and Medicaid programs. She cites a 1997 study that found ”…for every dollar spent to investigate and prosecute health care fraud in civil cases, the federal government receives $15 dollars back in return.”

So, enough of this nonsense about "fixing Social Security."


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Anonymous Anonymous said...

Part of the problem of going after fraud in the system is that it is left up to states and only partially funded by the feds. It takes a long time to build a case and frequently the hucksters just receive a slap on the wrist and open up a new "clinic" or "drugstore" right around the corner.

3:40 AM  
Blogger Meander said...

Thank you for clarifying the argument, Ruth - I got into a disussion just last week with someone who wanted to convince me that "entitlement" was the perfect word to use, and not right-wing framing, as I suggested.

It bloody well is right-wing framing.

6:22 AM  
Anonymous Anonymous said...

commenter 'ql' -

You're confabulating Medicare with Social Security?

6:24 AM  
Blogger Meander said...

Diane, not Ruth - sorry about that ;)

6:25 AM  
Blogger Dale Peterson said...

What about those ads on late night TV promising an electric scooter for free? Is this the kind of "durable medical equipment" you're talking about? Something tells me these TV salesmen are making a bundle.

6:35 AM  
Blogger low-tech cyclist said...

According to the CBO's 2008 projection, the Trust Fund won't be exhausted until 2049. Since the Trustees during the Bush years did have something of an agenda to show that Social Security needed fixing, I'd put more trust in that forecast than the Trustees' recent projections.

A quick comparison:

In 1997, the projected SS Trust Fund exhaustion date was 2029. (Trustees projection.)

In 2002, the projected SS Trust Fund exhaustion date was 2041. (Trustees projection.)

In 2008, the projected SS Trust Fund exhaustion date was 2049. (CBO projection.)

In other words, the projected exhaustion date of the Trust Fund is getting further away, not closer, as the years go by. Kinda like the date that we were supposed to get unlimited cheap power through nuclear fusion.

7:15 AM  
Anonymous Anonymous said...

yeah for us boomers. how about instead of americans talking about how this or that group has too nice a pension or too comprehensive a health care plan and so on...and how those things should be trimmed back to help the economy we pause to remember that;


8:17 AM  
Blogger Terry Ott said...

I see nothing wrong with the word "entitlement". It means pretty much exactly what SocSec and Medicare ARE, as well as describing unemployment benefits, food stamps, and other forms of "safety net" type arrangements for those who qualify.

Here are 4 definitions I got in a few seconds through an on-line inquiry:

1. Right granted by law or contract (especially a right to benefits).

2. Guarantee of access to benefits because of rights, or by agreement through law; also refers, in a more casual sense, to someone's belief that he/she is deserving of some particular reward or benefit.

3. Legal right to benefits, income and property that may not be reduced without due process under the law.

4. Program in which the federal government is legally obligated to make payments or provide aid to any person who meets the legal criteria for eligibility.

If "entitlement" bothers you, why? What "right wing framing" are we worrying about here? And what other encompassing term would you rather we use, then?

8:41 AM  
Blogger Linkmeister said...

Strict dictionary definitions can't compete with vernacular. Thanks to years of politicians on both sides using the word "entitlement" with negative tones, the public thinks there's the implied-but-unspoken adjective "undeserved" in front of it.

9:36 AM  
Anonymous Anonymous said...

Medicare is in trouble for the same reason that Social Security is NOT. Medicare costs are NOT predictable (i.e., WHO is going to get sick and need care? How much? What kind? What will it cost?). Medicare costs are rising because ALL healthcare costs are rising MUCH faster than general inflation.

Social Security, on the other hand, is totally predictable. All you need are ages, quarters paid in, wage history, and age and the calculation of what is owed (and for how long, given basic mortality tables) is EASY. You can figure this with a #2 pencil on the back of an envelope.

Medicare costs? Anybody's guess. We're not just consuming MORE care per person, each unit of care is costing more. And what new drug or new implant or new imaging device or new surgical procedure will be invented tomorrow (most of which will not improve either length or quality of life but will make a nice profit for several companies.

To Repeat:
Social Security=Predictable, not a problem;

Medicare=UNpredictable, BIG problem (but the problem is NOT Medicare per se, it's health care costs)

2:45 PM  
Anonymous Anonymous said...

To anonymous: Would you go as far as to say that SS is in trouble long term without some modification to the basic template? If so, isn't it due to baby boomers anticipated payouts? That's how I've been thinking, but maybe I'm wrong. True what you said about Medicare costs being a function of the health care delivery system. But another culprit is our lifestyle.

To linkmeister: So, if we shouldn't use "entitlements" in making reference to these programs collectively, do you have an alternative term? I think it's a perfectly GOOD term myself, and we should keep striving for a society where "entitlements" are less and less necessary to rely on or count on --- due to widspread prosperity. opportunity, health/fitness and educational achievement, as well as family support, local initiatives of all kinds and private charity.

Why do I say that? Because entitlements depend on institutions over which an individual has little or no control, and while those institutions may be strong and good and generous today --- one never knows about the future of them.

5:57 AM  
Blogger Terry Ott said...

The "anonymous" comment at 5:57 above is mine. Had trouble getting the system to work.

6:04 AM  

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