Many posts have discussed Social Security and Medicare.
Despite repeated warnings over the last three decades from the Trustees, the Congressional Budget Office, and others of the projected exhaustion of the Social Security Retirement Trust Fund in the mid-2030s, and the need to change the retirement program to make it sustainable, Congress and most Presidential administrations of both political parties have ignored the problem. Similarly, attempts to simplify and modernize the vocational standards for disability benefits have gone nowhere for two decades owing to opposition. Worse still, advocates, analysts and politicians have demagogued these issues, preventing reasonable discussions and compromise. This is despite the fast approach of the exhaustion date of the retirement fund and the context of increasing budget deficits, growing debt, and long-term interest rates higher than economic growth rates. It is becoming clear that this deep-seated reluctance to deal with difficult issues will postpone any action until right up to and perhaps even after the time of fund exhaustion, like recently experienced federal government shutdowns.Warshawsky notes some analysts have proposed fixes but adds:
Other analysts, perhaps more jaded, have claimed that even these second-best and third best actions will not be needed, because Congress will simply decide to maintain current benefit levels and continue to increase federal borrowing and fill in the growing Social Security funding gap with general revenues when exhaustion occurs. Indeed, it has been implicitly doing this since the cash flow to the Trust Fund turned negative in 2010. The counterargument to this view is that the resource needs for full Social Security benefits will continue to grow, and at the same time the Social Security fund is exhausted, so too will be the Medicare fund, and the costs for Medicaid, veterans, insurance exchange subsidies, and other health programs from rising health care costs and the demographic pressures of an aging population will explode the budget. Other budget pressures come from national security needs in a competitive, even hostile, global scene, along with rising interest rates and inflation. Moreover, there may be political resistance in some quarters of both parties to explicitly turn Social Security into a welfare program, dependent on general revenues and the annual budget process, away from its self-contained and stable revenue sources and long-term promised benefits. These pressures and considerations can be expected to f inally warrant some policy seriousness, albeit with much angst.
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