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Missiles Aimed at Social Security and Medicare

Comment

Missiles are pointed at Social Security and Medicare, the broad-based programs for older Americans. Some are stealth missiles. Some are misguided missiles. But both parties are pointing them.

Democrats and Republicans insist that their monkeying around won't put either popular program in jeopardy. They only talk of fairness and helping those of modest means. In truth, their weapons have been put at the service of agendas not directly related to the programs, and frankly, not good for them, either.

Since the beginning of 2011, American workers have enjoyed a "temporary" 2 percentage point cut in their payroll taxes covering Social Security. President Obama wants to extend the payroll tax holiday to the end of this year. This kind of tax break does put more dollars in working people's pockets and so provides an economic stimulus.

But astute observers know that such discounts can eventually lead to more anxiety than pleasure because they undermine what the program is really about. The payroll tax provides the money to cover Social Security benefits now and in the future. Under this setup, workers and their employers entirely fund the program. Thus, it is not welfare at all. Social Security is an earned benefit. You paid for it. That means no one can make a moral argument for taking that money away from you (not that some don't try).

If you want to undermine Social Security's moral foundation, a good approach is to reduce payroll taxes and replace the lost revenues with money from the Treasury. That is what the Obama administration is doing, with bipartisan help.

So while the dollars may be there, they are no longer all coming directly from the workers and employers. That means Social Security is no longer entirely self-funded, opening gaps in the program's defenses against those who would sink it.

Also, any extended holiday stops feeling like a holiday after a while.

It feels like the way things have always been. And so when after two years the leaders call for restoring the old tax rate, the program's foes (and some friends) cry "tax hike." As a result, it will get harder and harder to return Social Security to its formerly pure state of self-reliance.

As for Medicare, Republicans want rich folk to pay more for their coverage, and President Obama says he's open to the idea. Now that sounds eminently fair: Rather than chop away at the benefits, make the affluent elderly pay more for theirs.

Big problem: Medicare was created as a government health insurance plan for older and disabled Americans — regardless of economic status. Asking richer groups to pay more for their benefits reduces the program's value to those, sorry to say, with the most political clout.

And the program already contains a good deal of means testing. For example, Medicare Part B, covering doctors and outpatient visits, already charges stiffer premiums to those with higher incomes.

Republicans now talk of asking full freight from those earning more than $1 million. Of course, they can afford it — but again, they'll start caring less about the program. As Medicare loses its universal character, politicians will find it easier to chip away its value for those with money. Eventually Medicare turns into Medicaid, a welfare-like plan for the poor.

If you want the rich to pay more of Medicare's costs, that's easy. Simply raise their income-tax rates. The Treasury, which depends on income taxes, already pays for 75 percent of the Part B premium.

It's important to keep Social Security and Medicare honest, simple and universal. Policies that weaken any of these attributes can eventually threaten the whole deal.

To find out more about Froma Harrop, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2012 THE PROVIDENCE JOURNAL CO.

DISTRIBUTED BY CREATORS.COM



Comments

3 Comments | Post Comment
Agree entirely! I chomp at the bit at the audacity of calling SS an entitlement program and coupling it with welfare. Our government has treated our savings as a personal entitlement program or their personal credit card to the tune of 2.6trillion$ and would now attempt to ease us out, eliminate SS and have everyone again place their hard-earned dollars in the Wall Street coffers by saying we'd do a better job not relying on our government to safeguard our funds. Well ok, my employer and I contribute and I put that money where? In the care of greedy banks? In the stock market? I'd feel about as safe as putting my savings in lottery tickets or in a slot machine. Do we really want bankers and Wall Street diddling again with our finances? At their whim they can easily cause another economic collapse which could and would topple our country. Who's bankrolling Wall Street anyway? The people we hear about but never see, the uber, obscenely rich and powerful nationals of whatever country and/or political persuasion of the world. ....maybe. But If there are people determined to topple our economy or country, well what better way than taking away SS as we know it, privatize it and wait. We'd be puppets on a string, dependent on the economic whim of financiers and bankers. I don't want to be jerked around by anybody. Do you?
Comment: #1
Posted by: demecra zydeem
Thu Feb 16, 2012 8:39 AM
So you'd rather be jerked around by government than by Wall St is what you're saying. Not all banks are big evil entities. My local creadit union is friendly and trustworthy. I'd rather entrust my retirement fund to them in a low risk venture than give it to the government to squander it at will. The government is not obligated to pay out the money you've put into SS. Its not your and you have no control over it. You can pull your money out of a stock or investment and its still considered yours. People are already getting less than what they put into SS and by the time I reach retirement age, I'm sure I'll get close to nothing back.
Comment: #2
Posted by: Chris McCoy
Thu Feb 16, 2012 9:12 AM
In your column of Sat. 2-18 you stated social security is an earned benefit. While those now working will pay less into their account, while those retired get no relief. Last year 85% of our benefit was taxed since we had planned for our retirement and thus had additional income slightly more than SS. If I understand correctly, the amount of the taxed goes into into the general fund and is not returned to the SS account. This doesn't seem right!
Comment: #3
Posted by: d. w. menzies
Sat Feb 18, 2012 10:39 AM
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