The country's two marquee social insurance programs, Social Security and Medicare, face worsening fiscal conditions driven by near-term economic challenges and long-term trends of population aging and health care costs, according to the annual report released by the two entitlements' board of trustees.
The trust funds of Treasury bonds that provide back-stop funding for the programs will be exhausted sooner than anticipated: the Medicare hospital insurance fund will exhaust five years sooner than previously expected, in 2024, and the Social Security trust fund will expire in 2036, a year earlier than last projected.
The trustees, led by Treasury Secretary Tim Geithner, concluded the two programs are not on a sustainable path and that legislative action will be needed to avoid "disruptive consequences" to beneficiaries and taxpayers.
This report -- which, as the story indicates, was spearheaded by President Obama's own Treasury Secretary -- validates Congressional Republicans' warnings about the unsustainability of our entitlement programs. Paul Ryan did not propose a bold budget chock full of tough choices just for kicks. House Republicans did not pass his easily-demagogued plan because it was a politically safe move. They did so because without dramatic reforms, the social safety net will either vanish, or the government will enact desperate, economy-crushing, across-the-board tax hikes to keep them partially afloat. The Ryan budget averts both fates, and does so on our own terms.
The only "plan" Democrats have advanced in this process is President Obama's suggestion that Medicare spending be slashed by a powerful rationing panel of government bureaucrats, coupled with huge tax increases. More rationing, less care, and higher taxes: What an appealing trifecta.
Recommended
Democrats' endless refrain is that the Ryan plan would "end Medicare as we know it." Yes it would, starting ten years from now. The current system would be replaced by a moderately means-tested premium support plan, which would empower senior citizens to purchase private insurance from a government-approved exchange. By 2030, the average senior would receive more than $18,000 in annual premium subsidies. Let's be clear: Maintaining the status quo would also "end Medicare as we know it." The program would go belly-up, resulting in involuntary European-style austerity measures, dramatically slashed benefits, and vastly higher taxes. Which of these options is truly unacceptable?
Reforming our bloated and unrealistic entitlement regime isn't merely preferable. It's imperative. So, unfortunately, is raising the debt ceiling -- a concept the public detests. Republicans must not squander this obvious leverage point. And while we're on the subject of broken entitlements, how's leviathan's newest addition holding up these days?
President Barack Obama's main idea for getting quality health care at less cost was in jeopardy Wednesday after key medical providers called his administration's initial blueprint so complex it's unworkable.
Just over a month ago, the administration released long-awaited draft regulations for "accountable care organizations," networks of doctors and hospitals that would collaborate to keep Medicare patients healthier and share in the savings with taxpayers. Obama's health care overhaul law envisioned quickly setting up hundreds of such networks around the county to lead a bottom-up reform of America's bloated health care system.
But in an unusual rebuke, an umbrella group representing premier organizations such as the Mayo Clinic wrote the administration Wednesday saying that more than 90 percent of its members would not participate, because the rules as written are so onerous it would be nearly impossible for them to succeed.
Devastating. Repeal this unwieldy, unaffordable, destructive beast, then reform the programs on which American seniors have come to rely. Put another way, abandon the grossly negligent politics-as-usual games, and pass the Ryan budget.
UPDATE - Katie reminds me of this delusional assurance from Harry Reid in January:
"Social security is fine...it's fully funded for the next 40 years."
Incidentally, Reid was spectacularly wrong on this point even before today's report. Social Security is projected to run a revenue/outlay deficit every single year until it implodes in 2036.
Join the conversation as a VIP Member