What Entitlement Reform Means to Liberals
- Social Security: ‘Chained CPI’. Savings: $112 billion.
- Social Security: Lift cap on taxable earnings. Revenues: $500 billion or more.
- Social Security: Change the benefit formula. Savings: Would close half of Social Security shortfall.
- Medicare: Expanded means testing. Savings: $20 billion.
- Medicare: Faster payment reforms. Savings: $10 billion.
- Medicare: Drug rebates. Savings: $135 billion.
Source: POLITICO.
In a republic where the will of the majority or the largest special interest wins, the line that “the ideas that already have been blessed by groups on the left could allow President Barack Obama to get the discussion on entitlements going without infuriating his base” is encouraging. Short of a complete overhaul, which liberals will fiercely oppose, at least implementing these ideas would be a step in the right direction. We have to get the ball rolling somewhere, even if the proposed changes are drops in the bucket. Of course, stimulating the economy would be an easier way to generate revenue than reducing Medicare benefits for those that paid into the system for their entire careers. I sure hope I have an alternative option to seeing that deduction from my paycheck every week!
Liberals, by definision, cannot get away from Identity politics and income transfers. For Liberals, not only does the end justify the means; but the process justifies the means –even if the end result is not accompolished by the means.
I will have to read more into this as I am not knowledgeable on specific facts and concepts of public health policies. On a superficial level, it seems to me that neither side is able to come up with real solutions to our broken health care system. On one side, inefficiency and over-spending of public money (taxpayers) will hurt the economy and quality of care. On the other hand, high costs and long-term intensive treatment will continue to ruin people’s financial life once the insurance companies reach their cap, not to mention their health being in peril. So, establishing a safety net for these uncontrollable circumstances, whether it is with the state of private sector, needs to be more comprehensibly addressed in the long run.
The biggest obstacle to entitlement reform, at least Social Security entitlements, is the social security trust fund. As long as the pretense of a trust is maintained then it will be impossible to talk about reducing benefits or raising taxes. Thus, the most important element to entitlement reform is dispensing with the notion that there exists a trust to fund social security and stating that Social Security is a PAYGO system. Once we get through that legal/political/ emotional hoop then we can be honest about what is an appropriate level of taxation and benefits and who will qualify for those benefits.
As a conservative economist, most of those ideas are terrible – except for the the Chained CPI.
Substitution drives how we allocate scarce resources when prices change. I find it reasonable to peg the increases in all Cost of Living Adjustments to the Chained CPI – including congress retirement benefits, public worker retirement benefits, and the like.
Drug Rebates – I’m sure there couldn’t be any backlash from Big Pharma from that…