Anyone who is a progressive or a Democrat is proud of the fact that it was a Democratic President, Franklin D. Roosevelt, who gave us Social Security in 1935.
Anyone who is a progressive or a Democrat is proud of the fact that it was a Democratic President, Lyndon B. Johnson, who gave us Medicare in 1965.
But hard reality is setting in, that something major must be done to promote sustainability of both Social Security and Medicare, as Social Security is now believed to be starting to operate in the red in 2033, and Medicare in 2024.
That is a danger sign that requires serious negotiations and acceptance of a need for major changes in both programs for the long term future.
The answer is not privatization, however, but rather recognition of the longevity of American lives and work careers, and the realization that payroll taxes on both programs must increase.
In 1983, President Ronald Reagan and Speaker of the House Thomas “Tip” O’Neill negotiated a bipartisan agreement on Social Security which raised the retirement age to 66 for people born in the mid 1940s through 1959, and to 67 for those born after 1960. The agreement affected people with a long time to retirement, so was easy to adjust to without much controversy.
What must be done with Social Security would be to raise the full retirement age to age 68 for those born in 1980 and after, the beginning of the baby “boomlet” after a baby “bust” from 1965 to 1978. Additionally, those born in 1990 and after would have the age rise to 69. Additionally, all income, not just about $110,000, should be taxed, as is the case with Medicare.
As far as Medicare is concerned, the tax rate needs to be raised to collect more money, and the age of eligibility should go up to age 66 for those born in 1980 and after, and to age 67 for those born in 1990 and after.
No plan is going to have everyone satisfied, but with plenty of notice and planning, and with more money collected, and age levels raised, there is no reason why Social Security and Medicare cannot survive and prosper in the long term!
Hello Professor,
I agree that people living healthier and longer do to better conscience of diet and medical advances, that is causing Social Security and Medicare to try to continue with future shortfalls.
I would also contend that borrowing from China and other countries to continue two unfunded wars, complimented by the most aggressive tax cuts in history where we are not collecting enough cash flow to operate the government for what has now been the last 12 years; is as much if not more, of the problem of our social programs financially failing as early as 2024.
If the money we have spent on those wars, especially Iraq alone, and had this available to bolster up Social Security and Medicare, the Baby Boomers would not have to start to deal with this. I have been working for a paycheck since I was 12 years old and now that I am entering my 6th decade, all that I have paid into my whole life won’t be there because I am living too long.