Who Will Say No To Seniors?

[NATO AIR]

apparently not the democrats, not pres. bush, not the republicans... hmm, barrack obama and lindsey graham are about the only two guys i know who've said no...

http://www.washingtonpost.com/wp-dyn/articles/A134-2004Dec14.html
Who Will Say No?
Retirement Benefit Costs Are Out of Control

By Robert J. Samuelson
Wednesday, December 15, 2004; Page A33

Tommy Thompson announced his resignation the other day as secretary of health and human services and, in the process, gave us a quick tutorial on why we can't control exploding federal spending for retirement benefits -- the nation's No. 1 budget problem. We have a generation of politicians, of both parties and of whom Thompson is symbolic, who want to say "yes" to voters: Yes, you can have what you want, and you can have it now. The solution to this problem requires leaders to say "no" to voters: No, you cannot have all the retirement benefits you've been promised or desire, because we can't afford them. Americans reject that message, and our leaders don't dare deliver it.

The result is political doublespeak that, on an abstract level, acknowledges the terrible problem of "entitlements" but, on a practical level, does nothing about it -- or even makes it worse. At his news conference, Thompson was asked about his greatest accomplishment. "You got to put the complete overhaul . . . of the Medicare [program] pretty much at the top of the list," he said. That would be the Medicare drug benefit passed in 2003 and to be introduced in 2006. Here is thunderous doublespeak: Far from a triumph, the Medicare drug benefit is one of the worst pieces of social legislation in decades.

Let's see. Even before the drug benefit, the combined costs of Social Security, Medicare and Medicaid (which covers some nursing home care) were projected to grow by about 80 percent, as a share of national income, by 2030. This implies huge tax increases, immense budget deficits or dramatic cuts in other government programs. The drug benefit merely adds to the costs. In 2006 Medicare will spend an average of $2,069 on drug bills for each recipient, say Medicare's actuaries. By 2013, that reaches $3,367.

As baby boomers retire, Medicare drug spending rises rapidly. Without the drug benefit, Medicare spending was projected to grow from 2.6 percent of national income (gross domestic product) in 2003 to about 5 percent of GDP in 2030. Adding the drug benefit, total Medicare spending jumps to almost 7 percent of GDP in 2030 -- a huge increase. In today's dollars the extra drug spending would amount to $200 billion annually in 2030.

Well, if the cost is staggering, at least the need must be overwhelming. Actually, it isn't. True, drug costs are rising; the elderly pay more. But there's scant evidence that most Medicare recipients can't get the drugs they need.

Consider: Three-quarters of Americans older than 65 already have some insurance for drugs. Medicaid often covers the poorest of the poor. For many elderly people, drug costs aren't oppressive. About 10 percent have no drug costs at all, the Congressional Budget Office estimates. An additional 29 percent have annual costs of less than $1,000. Only 28 percent have costs exceeding $3,000. Those figures represent total costs, including what insurance pays. As for out-of-pocket drug spending, it averaged $623 for people older than 65 in 2000. In opinion surveys, only about 3 percent of Medicare beneficiaries say they can't get the drugs prescribed for them -- for economic or other reasons.

Let it be said that there is a case for a Medicare drug benefit covering truly catastrophic costs. But that benefit should have been a carrot for basic reforms, raising the eligibility age and slowly shifting more overall costs to retirees. No one attempted that bargain. Instead, President Bush, Secretary Thompson and every member of Congress who voted for the Medicare drug benefit knowingly worsened the long-term budget outlook without solving any major social problem. The main result is to allow the elderly to spend more of their money on things they want by shifting the cost of drugs to younger taxpayers.

What motivated this legislative atrocity? Here's Thompson's answer: "Seniors from Alaska to Florida demanded that we provide them a prescription drug benefit . . . and I'm happy to say we have delivered." Another interpretation would be that the Bush administration was trying to buy the support of retirees with hundreds of billions of dollars of new handouts. Either way, it's the politics of "yes." One narrow lesson: Be suspicious of the Bush administration's forthcoming proposals for Social Security "personal accounts." If the drug benefit is any guide, the motives are mainly political.

The larger lesson is that Americans are living in a self-created culture of delusion. The central truth about retirement "entitlements" is this: The only guaranteed way to cut spending growth is to cut benefits. But this truth is unspeakable, so no one speaks it. In this climate, Thompson's self-serving boast passes as a plausible claim when it's actually an absurdity.

There's a compartmentalization of thought and conversation. Rapid spending growth is considered "bad," but anything that might cut that growth can't be discussed. By and large, the news media abide by this protocol of deception. Not surprisingly, news coverage of the Medicare drug debate was abysmally one-sided. Hardly anyone mentioned who would pay the long-term costs or asked whether the benefit was justified. Much coverage focused on gaps in the proposed coverage. Meanwhile, a drumbeat of other stories deplored present and future budget deficits. The inconsistency was glaring.

In wealthy democracies -- welfare states all -- individual benefits once conferred are considered sacrosanct, but when their total costs threaten the collective good, they must somehow be controlled. There's the paralyzing contradiction. The politics of "yes" must ultimately yield to the politics of "no" -- and the longer it's delayed, the more painful it will be.

© 2004 The Washington Post Company

 

[ciplexian]

that benefit should have been a carrot for basic reforms, raising the eligibility age and slowly shifting more overall costs to retirees.

The prescription drug benefit debate was so one-sided partly because it's a genuine change-- drug costs are rising so quickly (now that interest rates are going back up it'll be interesting to see if this slows. insurance companies' revenues rise when rates increase, so they may be able to afford to charge less for medications), but the more basic reforms are what are sorely lacking... even without the new benefits, the current system poses an unsustainable strain on the budget. Naturally, the benefit age should have been tied to average life expectancy, but due to political reasons that's not going to happen.

And what ever happened to the extended family? There was an interesting book out recently chronicling the negative impact of social security on birthrates... people who need no one to take care of them during old age have less incentive to have children. Birthrates have already fallen below replacement level in most other developed nations.

Bush has a 2 year mandate to reform the system, the people have given him solid majorities... will he do it?

 

[Merlin1047]

apparently not the democrats, not pres. bush, not the republicans... hmm, barrack obama and lindsey graham are about the only two guys i know who've said no...

Tommy Thompson announced his resignation the other day as secretary of health and human services and, in the process, gave us a quick tutorial on why we can't control exploding federal spending for retirement benefits -- the nation's No. 1 budget problem. We have a generation of politicians, of both parties and of whom Thompson is symbolic, who want to say "yes" to voters: Yes, you can have what you want, and you can have it now. The solution to this problem requires leaders to say "no" to voters: No, you cannot have all the retirement benefits you've been promised or desire, because we can't afford them. Americans reject that message, and our leaders don't dare deliver it.

I agree with most of the post. Senior citizens groups in general and the AARP in particular have become one of our worst enemies in the battle of fiscal responsibility. I'm a member of the AARP and I continue to maintain that membership simply to needle the organization and their voracious appetite for entitlement programs plus I can write my elected representatives and urge them to defeat measures sponsored by the AARP and I believe that my sentiments have more weight if expressed as a member of AARP. The other reason I maintain membership is that it keeps me from having to pay full price at hotels - okay, I'm cheap - what's your point?

But let's talk about that social security thingie, because that tends to get my dander up. The extract from the article you posted that burns my butt is "No, you cannot have all the retirement benefits you've been promised".

Now the feds have been stealing a portion of my income for social security since I took my first job at age 13. They have also been demanding that my employers "contribute" on my behalf. Given employer contributions, deductions from my salary and interest, the total amount that should be available for me to draw upon should be between 250 and 300 thousand dollars.

Then our sleazy politicians couldn't stand all that money just sitting around in the social security trust fund. So, under the auspices of the Johnson administration, they decided to make that money available for their favorite activity - spending it. They promptly frittered the fund away on "gimme" programs paid to people who refuse to work, to subsidize illegitimate children, to subsidize laziness and stupidity, to subsidize social engineering programs, to give themselves huge pay raises and outrageous retirement plans and to fund various idiotic pork projects. So now all that money has evaporated like a drop of water in Death Valley in the summer.

Now these political scum, who will draw a retirement of $15,000 PER MONTH after just ONE full term in the Senate, are telling me that I can't have the money that they have stolen from me all these years. See, I've made the mistake of living below my means all these years. I've saved and gotten lucky on a couple of investments and when I retire, I should be fairly comfortable. Along come the politicians and tell me that because I have been concerned about the future, because I have accumulated some assets, now my eligibility to collect the money that was STOLEN from me by the government will be "means tested".

So once again, the damn government subsidizes incompetence. Had I squandered my income as fast as it came in I could be collecting money by the wheelbarrow load. If I had nothing with which to support myself, the government would come running, eager to heap largesse on me. But because I don't NEED social security to survive, they reason that I am not entitled to collect that for which I paid. BULLSHIT!!!! When we start means-testing those sons-of-bitches in the Senate before we pay them 15 thou a month, THEN we can talk about means-testing me and not one damn second before.

We need to get control of those entitlement programs which are merely handouts. We need to somehow convince rapacious, senile oldsters that it is not the function of government to take care of their every need until they die. But when it comes to social security - I want to be paid back an amount equal to what I paid in, plus what my employers have paid on my behalf, plus a reasonable interest rate for the thirty-some-odd years the government has been holding my money.

It wasn't my fault that social security is facing bankruptcy. Congress stole the money. Now let the bastards sweat to fix it and still live up to the committments made to the people who have had their income siphoned off by the government under apparently false pretenses.

 

[NATO AIR]

It wasn't my fault that social security is facing bankruptcy. Congress stole the money. Now let the bastards sweat to fix it and still live up to the committments made to the people who have had their income siphoned off by the government under apparently false pretenses.

i can agree with that.. this is going to be the interesting focus of all this, how are they going to keep their promises?

 

[ciplexian]

i can agree with that.. this is going to be the interesting focus of all this, how are they going to keep their promises?

Keep the promises that were made now and don't make any more. Unfortunately it's not going to happen.

 

[NATO AIR]

Why do I have the feeling that this could be the issue that destroys the GOP's congressional dominance?

I don't think they, or the Democrats (if they were in power) could pull this off without pissing off the country at the beginning of the reform

 

[ciplexian]

Why do I have the feeling that this could be the issue that destroys the GOP's congressional dominance?

I don't think they, or the Democrats (if they were in power) could pull this off without pissing off the country at the beginning of the reform

I don't think the Congressional GOP would pass a reform if it would destroy their Congressional dominance. They've already showed they put politics over principle when they passed the drug entitlement. They'll likely pass some extremely watered down reform, and I hope for the country's sake it works, but most likely this will be an issue that we'll be dealing with in crisis mode around 2020.

 

[NATO AIR]

I don't think the Congressional GOP would pass a reform if it would destroy their Congressional dominance. They've already showed they put politics over principle when they passed the drug entitlement. They'll likely pass some extremely watered down reform, and I hope for the country's sake it works, but most likely this will be an issue that we'll be dealing with in crisis mode around 2020.

agreed, on this they are just as pandering as the democrats