Imagine you are a Member of Congress deeply troubled by the huge federal deficits. You would likely be fully aware that unless serious reform happens soon, the existing major entitlement programs will eventually consume the entire federal tax revenue.
Now, imagine learning that one simple reform could provide the following results:
You might be thinking that this would be the easiest piece of legislation to sponsor and pass on Capitol Hill – but, you would be wrong.
Yesterday we published A Nation of Dependents focusing on the dramatic increase in both the amount and distribution across the population of various government benefit programs. We also noted that while Americans generally believe that federal deficits need to be brought under control, few are willing to reform major entitlements like Social Security and Medicare to help reduce over spending and balance the federal budget.
The above scenario is outlined in a Washington Times feature based on just one change to Social Security and Medicare: gradually increasing the retirement age from 67 to 70 for Social Security benefits and from 65 to 67 for Medicare. The projections for savings are based on analysis of by the Congressional Budget Office, the Committee for Responsible Budget Reform, and the McKinsey Global Institute.
Life expectancy has increased by about 15 years for both men and women since Social Security was first implemented; by eight years since Medicare was adopted. And there is abundant evidence that Americans want to work longer, be productive citizens, and continue to earn – but, they also don’t want to sacrifice government benefits. Just 24% are willing to consider a cut in Social Security and only 16% for Medicare according to recent public opinion polling.
Politicians know that pledges to “preserve and protect” Social Security and Medicare win them votes as well as campaign contributions. Conversely, even a hint of reforming the entitlement programs is red-meat ammunition for any candidate’s opponent, and sure to bring out the pitchforks with the electorate.
Today, at 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for October 31st, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 29th, 2014 | John Ransom