Opinion: Why would Republicans rule out Social Security and Medicare reform?
If you follow policy debates long enough, arguments you never thought you’d hear can become key components of the two parties’ policy platforms. That’s certainly the case when it comes to some Republicans and their new “never touch Social Security and Medicare” position.
Now, to be fair, the GOP’s well-intentioned engagement in the overall debt-ceiling dispute is limited by the short time Congress has to raise the limit, all but ruling out credible reforms of Medicare or Social Security. Reforming these two programs will take a considerable amount of time and requires bipartisan action. However, this reality is no reason to assert that the programs’ benefits should never be touched.
Of course, if Vance and friends insist on not touching benefits, they could address the Social Security and Medicare shortfalls with enormous tax hikes. For Social Security alone, when the trust fund dries out, they will have to agree to immediately raise the payroll tax from 12.4% to 15.64% — or close to a 25% tax increase. Add to that the tax hike necessary for Medicare and then repeat the exercise over the years to fill the entire shortfall.
In other words, these problems shouldn’t surprise anyone. When Social Security started, life expectancies were lower. In 1950, there were more than 16 workers for every beneficiary. That ratio is now below three workers per retiree and will be only 2.3 workers per retiree by 2035. Add to this trend decades of politicians buying votes by expanding benefits beyond incoming payroll taxes and you have a true fiscal crisis on your hands.
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