July 07, 2012
In the middle of an article that is largely devoted to discussing the absurdity of Republicans attacks on the Affordable Care Act’s cost controls for Medicare, given their repeated efforts to slash funding for the program, the NYT told readers:
“such talk underscores how far Republicans and Democrats are from truly squaring with the public about curbing the growth of the major entitlement programs: Medicare, Medicaid and, to a lesser extent, Social Security.”
While the NYT might want to see the growth of Social Security spending curbed, there is no obvious reason that it is necessary. In fact, given the loss of savings among older workers due to the collapse of the housing bubble and the downturn, there are strong arguments for increasing the generosity of benefits.
According to the Congressional Budget Office the program is full funded until 2038 with no changes whatsoever. The increased revenue needed to keep the program fully funded for the rest of the century is a bit more than 5 percent of projected wage growth over the next three decades.
Polls have consistently indicated that people would rather pay higher Social Security taxes than see a cut in benefits. The claim that there is somehow a need to curb the growth of Social Security spending is an expression of the political views of the NYT. It is not a reflection of the finances of the program.
While there is a need to restrain the cost growth of Medicare this is due to the fact that health care costs in the United States are so out of line with costs elsewhere in the world. If per person health care costs in the U.S. were comparable to those in any other wealthy country we would be looking at long-term budget surpluses, not deficits.
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