Right-wing advocates of “fiscal responsibility” typically target “entitlement programs” like Social Security and Medicare as the main cause of the country’s financial problems. They prefer “market solutions” to questions of retirement security and health care coverage. To accomplish this privatization agenda, they promote the mistaken notion that both Social Security and Medicare are in crisis and are unsustainable.
In doing so, however, they ignore or distort some basic facts, progressive economists say. Advocacy groups and think tanks like the Campaign for America’s Future, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Center for Economic Policy Research and the Center for American Progress tend to agree that Social Security is not in any imminent financial danger and that Medicare’s problems are not inherent but are related directly to the general crisis of health care in the country.
Take Social Security, for example. Social Security will have a $5.5 trillion surplus by 2027 and will be able to pay all benefits promised under current law, through 2041. In addition, Congressional Budget Office estimates show that if no changes are ever made to the Social Security program, in 75 years, the program will be able to afford to pay retirees better benefits than they receive now.
By comparison, if no changes are ever made to the health care system, in 75 years the cost to the country will equal about 99 percent of current Gross Domestic Product.
Nancy Altman, an economist and former advisor to Federal Reserve Chair Alan Greenspan, concurred. Of all federal programs, Social Security is the most “fiscally sound,” she noted. If predictions are correct and the program does experience budget shortfalls in 75 years, they will be “manageable.” By comparison, she noted, predicted deficits in the program 75 years from now will be less than the cost of the Bush tax cuts for the richest one percent of Americans.
Altman added that according to federal law, saving money in the Social Security program does not automatically translate into savings in the federal budget or in anyway help balance the budget.
At a time when Americans have lost $2 trillion in housing value and $6 trillion in retirement savings as a result of the market crashes, this is no time to privatize or gut the social safety, these progressives argued.
“We don’t have an entitlements crisis,” economist Dean Baker, co-director of the Center for Economic Policy Research, added, “we have a health care crisis.” The word “crisis” should not be used to described Social Security’s financial situation either. Social Security is not “in anything that any reasonable person can call crisis.”
Medicare’s long-term sustainability is tied directly to the need for reforms in the health care system as a whole. “The root of the deficit problem is health care costs. Our leaders must get serious about improving our health care system. A concentrated effort by policy makers to control health care expenditures will help American business compete internationally and free resources for other pressing needs,” read a joint statement this week by Hickey, Baker and Lawrence Mishel of the Economic Policy Institute.
Tax cuts and entitlements attacks….same song …same old tired party.