Here’s a simple statement that even someone as dumb as me should be able to embrace:
Before creating massive new entitlement programs, perhaps we should shore up existing programs that millions of people depend on — and that are quickly running out of money.
The Social Security and Medicare Trustees, charged with keeping these two critical programs solvent, recently issued their annual report and the news wasn’t good. “Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing,” the report said.
The report notes that the Trustees project the Medicare hospital trust fund will run dry in 2026, a year earlier than was reported just a year ago. The combined two Social Security trust funds for disabled individuals and seniors will be exhausted in 2034 – only 13 years from now. After that, recipients will receive only 78% of scheduled benefits.
Some 61 million Americans collect Social Security benefits each month, about one in five citizens. For about one-quarter of seniors, Social Security provides at least 90% of income. For half of seniors, it provides at least 50% of income. A similar number of seniors receive Medicare benefits, which provide the bulk of their health care services.
There are few government programs more important than Social Security and Medicare. Nearly everyone, except the ultra wealthy, depend on these programs. The Social Security Act was signed into law in 1935, 86 years ago. Medicare has been operational for 56 years, since 1965. Most recipients pay into these programs their entire working lives.
Over the years, responsible members of Congress have acknowledged that these trust funds must remain solvent, either by increasing taxes or reducing benefits – or both. But Congress has done very little to stanch the bleeding, no matter which party is in control.
Instead, the Biden administration and the Democrats are now pushing hard for broad new entitlement programs, including lowering the Medicare eligibility age to 60 from 65 and adding dental, vision and hearing benefits. In other words, they would make millions more people eligible, and broaden benefits, for a program that is already in financial trouble.
And they would add more expensive entitlements, like generous paid family and medical leave, child care, universal pre-kindergarten, and free community college, including living expenses.
Personally, I don’t think these new programs are needed with the economy recovering nicely and the danger of higher taxes and deficit spending.
But even if these programs could be justified, it only makes sense to secure existing entitlement programs that are critically important before enacting new ones. Congress ought to focus hard on Social Security and Medicare, ensuring they remain solvent for future generations, before spending $3.5 trillion on new programs.