Remember the "Notch Babies?"
A key component of Rep. Ryan's proposal calls for a radical change in the way Medicare works. For everybody over 55 the system will remain unchanged, while for those under 55 the current defined benefit program will be replaced with a block grant voucher-based system.
Besides the iniquity of such a change, history suggests that it's politically unworkable. Any proposal that creates a radical reduction in benefits based on an arbitrary cut-off will face a buzz-saw of opposition.
One only has to recall the so-called "notch babies" to see how this would play out -- and the notch babies weren't even right!
A key component of Rep. Ryan's proposal calls for a radical change in the way Medicare works. For everybody over 55 the system will remain unchanged, while for those under 55 the current defined benefit program will be replaced with a block grant voucher-based system.
Besides the iniquity of such a change, history suggests that it's politically unworkable. Any proposal that creates a radical reduction in benefits based on an arbitrary cut-off will face a buzz-saw of opposition.
One only has to recall the so-called "notch babies" to see how this would play out -- and the notch babies weren't even right!
The issue as died down in recent years, undoubtedly because the affected class of people is aging away, but for a long time a hot controversy bubbled around a supposed injustice that allegedly caused some people born between 1917 and 1921 to be unfairly given lower social security benefits than people born before or after those years. These so-called "notch babies" complained loudly and insistently for many years, although ultimately nothing was ever done about it.
And the reason why nothing was done was that there was no actual injustice. In fact, the notch babies were the beneficiaries of a windfall, although few could be persuaded of that fact.
What had happened was that when Congress decided to make cost of living adjustments automatic, the formula used to determine the benefit was flawed and resulted in retirees getting overly generous COLAs for a number of years. When this was discovered the formula was changed, but Congress decided it would cause too much hardship to change the benefit for those already getting it, so people born in 1916 and earlier kept their higher benefits. Congress also decided to ease the transition between the two so that there wouldn't be a huge gap between the 1916 class and the 1917 class which would have been politically untenable. This is the key point. Even though it was an undeserved windfall caused by a government mistake, there was no stomach in Congress to create an abrupt fix. Instead, those born in 1917 through 1921 also got higher benefits than they should have, although at lesser amounts each birth year until 1922 when the formula reached the correct value where it has remained ever since. While the notch babies insisted they were being penalized, every disinterested party who ever looked into the issue found that there was no case. They were actually enjoying a windfall, not a penalty. Despite having no case, however, the notch babies were a constant, noisy and insistent force for years.
Imagine, in contrast, how much more noise will be made by the huge -- and growing every year -- class of those disenfranchised from Medicare under Ryan's plan. It just so happens that I just squeeze by Ryan's deadline and under his plan I will still get Medicare when I retire. But my sister, two years younger than me, and all the rest of my younger siblings will do without. Yet all of them will still pay Medicare tax so I can get Medicare, as they must, in order for the benefit to exist. Is there anyone that thinks this could possibly be sustained, particularly as the changeover date approaches? Or will it be like the temporary Bush tax cuts, the yearly postponement of the Medicare reimbursement formula reform or the annual fiddling with the Alternative Minimum Tax -- and never come? In other words, does anyone think that it's politically possible to ever actually execute this plan?
If a plan can't ever be executed, then clearly it can't solve the problem it's supposed to solve.