(Centennial Fellow) For an example of the genius of a recently floated, reform–government, multi–trillion–dollar debt–reduction plan, look at how it would salvage Social Security while simultaneously tickling the fancies of experts left and right.
Maybe you don’t like the provision raising the benefits retirement age to 68 and then 69, but read on. The changes don’t happen for decades, people are already living and working longer than when previous retirement ages were decided, the provision includes rescue clauses for below–age employees in tough spots and it would save gobs of money.
Many might not be enthusiastic either about a provision upping the income level at which payments would still be due on the payroll tax. The change would nevertheless raise needed revenues as it lowered the ire of liberals insisting the present system is inequitable, and next comes the best part of all: a new way of indexing initial benefits.
The first thing to understand about this idea is what too many news outlets don’t seem to grasp. No one will get less in inflation–adjusted dollars than what people in similar circumstances receive today. But the best off among us would get less in the future than they would otherwise receive under a 1970s–introduced formula that had the program on a sure march to financial mayhem.
With a quibble here and another there, experts as ideologically different as Peter Orzag and Charles Blahous see major virtue in this Social Security restructuring as envisioned by the co–chairmen of President Obama’s bipartisan debt commission. Orzag, who signaled his blessings in a New York Times op–ed piece, is the top budget official in the Obama White House. Blahous, who has also written of his approval, is a Social Security trustee and served as an economic assistant to President George W. Bush.
Entitlement reforms are easy to run away from if you are a political coward and to demagogue if you are a political opportunist. The fact is that Social Security, Medicare, Medicaid and other entitlements constitute a major portion of the federal budget, are growing like crazy and must be addressed if a killer debt is to be tamed. Two who grasp that truth are the aforementioned co–chairmen, the wise former Republican Senator Alan Simpson and the devoutly pragmatic Erskine Bowles, who was a chief of staff for President Clinton.
And so it is that they also take on Medicare and Medicaid, going to far as to propose growth caps on Medicare, but their grasp of truths does not stop there. They see a federal government shooting skyward like Jack’s beanstalk, and suggest job eliminations and wage freezes. They see wasteful spending at the Pentagon, and call for defense cuts consonant with national security. They endorse deduction–erasing, rate–lessening simplification of our social–engineering income tax.
They say we should bring anti–competitive corporate taxes down even as we also whack away at loopholes. They take note of a welfare state gone bananas and figure out means not only of stopping its growth, but reducing it. They notice—who could miss it?—the bad joke of farm subsidies and tell us to quit laughing and get serious about their demise. They see all kinds of programs we can no longer afford and should never have been the federal government’s business anyway, and say we should end them.
These two are not pronouncing debt dogma. They aim to start a serious discussion and, by my best guess, wanted all these substantive thoughts on the table before the commission puts out a meaningless formal report, as commissions often do.
Simpson has joked that he and Bowles may have to go into a witness protection program, and considering the irresponsible overreaction among many liberals and some conservatives, that seems almost a real possibility. But while there’s nothing that says all their items are sacred and should be adopted without debate or change, what we have here is an intelligent, principled, America–saving mix of the progressive and the prudent, something actually practicable instead of fierce, knee–jerking, political insistence on wishes that will never be realized.
Jay Ambrose is a Colorado–based columnist and Centennial Institute Fellow. He was formerly Washington director of editorial policy for Scripps Howard newspapers and the editor of dailies in El Paso, Texas, and Denver, is a columnist living in Colorado.