Find a Fix to Fiscal Debt
Federal projections now show Medicare and Social Security running out
Tom Price, the former Republican congressman from Georgia’s 6th District and later secretary of Health and Human Services in the Trump Administration, watched the 2023 State of the Union from his home in Roswell, shaking his head in disappointment as President Biden received a bipartisan standing ovation for vowing to potentially bankrupt the country.
Stating that “some Republicans” want to cut entitlement spending, Biden averred: “I won’t let that happen. Social Security and Medicare are a lifeline for millions of seniors. Americans have been paying into them with every single paycheck since they started working. So tonight, let’s all agree to stand up for seniors. Stand up and show them we will not cut Social Security. We will not cut Medicare.”
He then transitioned into a well-worn fiction. “Those benefits belong to the American people. They earned them.”
Price, a former House Budget Committee chairman, points out that Americans have long believed these benefits are like a 401(k) where you pull out what you put in. According to Price, the average couple forks over around $100,000 in payroll taxes that fund these entitlements and gets back about $300,000 in benefits. That math doesn’t work for long, and Price warns we’re reaching a point of no return as Boomers continue to move from contributors to beneficiaries.
Price brings credibility to the issue: He tells me he’s the last chairman to pass a balanced 10-year budget, without raising taxes, through the full Congress.
“This has been the most predictable fiscal challenge in the history of the world,” Price says. “One thing the Left does so well is to convince people that doing nothing is a good thing, when it will lead to a catastrophe.”
But the applause for Biden’s pledge came from Republicans, too. “I was stunned,” Price says about the GOP’s ovation for doing nothing. “It’s not conservative fiscally; it’s not conservative ideologically.”
Price says the U.S. missed numerous opportunities to index eligibility to age expectancy. When we set 65 as the age for Social Security in 1935, that was essentially the average life span for American men. Now it’s in the high 70s, with many Americans drawing benefits for a full third of their lives.
Now over $32 trillion in debt, the nation can’t get its fiscal house back in order by trimming discretionary spending, which House Republicans tried to do during the debt limit debate earlier this year. My friend Phil Smith of Athens works for the Concord Coalition, a nonpartisan group that works across the nation to warn of the dangers of our deficits and debt, informs us that discretionary spending comprises just 28% of the federal budget. The rest is mandatory spending on entitlement programs and servicing of the debt, the latter a growing monster devouring more and more of our tax dollars.
Federal projections now show Medicare and Social Security running out of money in the next decade, requiring a 20% cut to Social Security benefits in 2034 and 11% cut to Medicare Part A in 2031.
Price says there are no easy answers at this point because senior Americans do depend on these programs, but there’s still a small window for helpful reforms.
Because people are not only living longer but also staying healthy longer, “there’s an opportunity to reform the system to not cover routine health procedures for healthy people. Let seniors voluntarily opt out of the system, access a system that’s more flexible and then join Medicare when they need it.”
Price says the Congressional Budget Office found that this reform would save money for both the Medicare program as well as for those who opt out.
“None of this can fit on a bumper sticker or be explained in 30 seconds, so it’s ripe for demagoguery,” Price says. “I think some want Medicare to collapse so we’ll move to a single-payer system.”
Single payer, of course, means a complete government takeover of healthcare – socialized medicine in other words.
Social Security is easier to solve, though still difficult politically. In addition to coupling eligibility to life expectancy, Price would reduce the pool of future beneficiaries by, again, allowing voluntary opt-outs at a certain age. They would have to sacrifice what they’ve already paid in and would face mandates to put money into private retirement accounts but could have significant upside.
A longtime orthopedic surgeon, Price has spent a career discovering when something is broken. He knows how to fix it. But the patient has to listen before the damage is irreversible.
You can see Brian Robinson on The Georgia Gang Sunday mornings on Fox 5 Atlanta.