Monday, June 09, 2014

Social Secuirty and Medicare -- The Sky is Still Falling

Frank Bruni has penned an entirely banal editorial, echoing those of years and decades past, about how unfair it is that Americans are "saddling" the next generation with the cost of Social Security and Medicare. Bruni pitches people over the age of forty against the "Millennials", but it seems like only yesterday that poor Gen. X was going to be forced to support the Baby Boomers.

For Bruni, Bob Kerrey proves to be a veritable fount of platitudes,
This subject haunts him more and more. “If we’re trying to figure out how to advance the next generation’s future, we need to be spending more on the next generation, and we’re spending it on yesterday’s generation,” said Kerrey, 70. “I am not the future. My 12-year-old son is. But if you look at the spending, you’d think I’m the future.”
So the argument is that we need to spend more supporting children? No, of course not.
Kerrey is referring mostly to Social Security and Medicare, which, along with Medicaid, are the so-called entitlements that claim a larger and larger share of the federal budget.

He’s fixated on those sorts of numbers: According to the Congressional Budget Office, Social Security, Medicare and Medicaid totaled 6.7 percent of the country’s gross domestic product in 1990. By 2010, they were 10 percent. And by 2038, such spending may represent 14.3 percent. It’s hard to see how that leaves much money for discretionary spending on infrastructure, on education, on research, on a range of investments that safeguard or improve the America that today’s young people will inherit.
Of course, by 2020 such spending may not represent 14.3 percent, but that's always beside the point in this type of editorial

If the problem is that we need to shift those numbers, let's consider what has happened when the President has proposed Reagan-style adjustments to FICA taxes and benefits. The Republicans have obstructed those efforts, and have even demagogued against the President as trying to cut Medicare benefits for seniors. The politics seem to be irrelevant for Bruni, but it's reasonable to infer both that one of the two political parties has no interest in reforms that will help to preserve Social Security and Medicare over the long-term, and that very same party is too craven to be honest with its supporters about its goals. And that's why haven't we moved forward on the obvious solution, which Obama has at times attempted to pursue despite strong opposition to benefits reductions from within his party. How does Bruni see it?
That unwillingness [to look at budgetary math] includes the predictable pushback from many members of Congress, from voters and from various advocacy groups when proposals are made to limit the growth of Social Security by, say, fiddling with cost-of-living adjustments.
Well, yeah, but it does bear mentioning that when one party was ready to forge ahead with reforms, the other party refused to cooperate.

Bruni continues with a complaint that we're already making cuts,
Talk to physicians and other scientists who have long depended on research grants from the National Institutes of Health to keep the United States at the forefront of invention and innovation and they’ll tell you how thoroughly that spigot has closed over the last 10 years. They’re defeated, despondent.
Would Bruni have us believe that those doctors were focusing their full effort on childhood illnesses? Of course not. But if not, how does he reconcile his complaints about spending cuts with his complaint that we're spending too much money on the medical needs of older Americans?

Bruni offers another tired complaint,
The Urban Institute released a report in 2012 that looked at figures from 2008 for the combined local, state and federal spending that directly benefited Americans 65 and older versus spending that went to Americans under 19; the per capita discrepancy was $26,355 versus $11,822. Julia Isaacs, a senior fellow at the institute, told me that while data for subsequent years hadn’t been analyzed yet, it wouldn’t show a significant change in that gap.
Sure, if you include Social Security and Medicare, we spend a lot more money on older Americans than we do on kids. But Social Security is a program that you pay for over your working years, and for the average participant the return on the investment is not particularly impressive. Similarly, Medicare is supported by people over their working lives and it's reasonable for people who have spent their lifetimes paying into the system to receive its benefits when they retire.

Would Bruni complain that the money in his 401K plan is not clawed back for the benefit of younger workers? That the long-term care insurance he paid for ends up paying for his long-term care? One would expect not. While an argument can be made about whether workers should pay more or whether the payout is too high (or too low), there's no equivalence between Medicare and Social Security payments, which workers have paid for, and government funding for kids.

As for Bruni's general complaints about how his peers talk about millennials,

Sure, some people make a habit of complaining about "kids these days", but such has it always been. Bye Bye Birdie came to stage in 1960. here's a memory from 1967:

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