Now that the government is back up and running, the GOP is already working on their next set of demands to take to the Budget conference committees. And of course the issue of entitlements once again comes to the forefront. At the beginning of the year, I wrote that Dems should not touch entitlements but instead take the issue to the people making certain that they understand that there is a very clear difference. Apparently the AFL-CIO is concerned about the Dems caving to get a budget deal.
In an article published this week in Huffington Post (AFL-CIO To Democrats: We'll Work To End Your Career If You Cut Social Security Or Medicare) its president was quoted saying: “No politician … I don’t care the political party … will get away with cutting Social Security, Medicare or Medicaid benefits. Don’t try it,” So what actions towards entitlements, if any, would be acceptable to the public without drawing a target on your back?
First of all, I need to reiterate what I wrote then which is just as valid (maybe more) today as it was at the beginning of the year. People are not going to approve of any entitlement cuts as long as there is money on the table. And as long as marijuana is on the controlled substance list, there is money on the table. Over 50% of the general public favors this action (Support For Legalizing Marijuana Grows To Highest Point Ever In Gallup Poll) including a majority in some of the most conservative voting states in the Union like Utah and Texas. So, until Congress is will to do this, they are not going to be able to CUT entitlements.
However, there are measures that can be taken that the public approves of. Politicians can poll this again if they like, but the results will be the same.
First of all, Medicare needs to be able to LEGALLY UNDER THE LAW, negotiate drug prices. The public supports this at a very high rate. Drugs prices make up 25% of the Medicare budget. Under the current law, they cannot negotiate Medicare drug prices. This is resulting in Big Pharmacuetical Welfare. If the GOP is so concerned about deficits in entitlements, this is the place to start. Of course, if POTUS Obama proposes it, the GOP is sure to say NO. Let them. This is a winning strategy and must be done before any other changes to Medicare/Medicaid are done.
BTW, the public does not support structural changes to these entitlement programs so plans like Paul Ryan’s to privatize does not go over at all with the American people. Why? Because the American people don’t trust Congress not to MUCK IT UP! The programs currently work to everyone’s liking. The public supports tweaking these programs to make them better but they don’t want you to tear down what works and put something else there in its place. So let Ryan keep on with his losing plan. Every time the GOP goes against what the public wants, it only makes them more out of touch with those who vote.
As far as Social Security goes, there are tweaks that will be accepted by the public. For one, the public supports modest raises in the retirement age for those born after 1970. A two year across the board raise in the age for those born from 1970-1999 and an additional year for those born from 2000 onward, will not create a public uproar.
Also, it is imperative that the maximum contribution level is raised from it artificially deflated current status. I say this because it has been on purpose kept low to keep rich people’s taxes down. It should be raised to $150K and tied to growth in real wages. If real wages grow, it should grow proportionately. If real wages shrink, it should decrease automatically. This should be an automatic increase/decrease not tied to anything political, just real statistics. These two changes alone, will help propel Social Security’s future much further down the track.
Then there is the subject of means testing which is a GOP favorite. This is a very tricky slope deliberately. The GOP goal is to let rich people opt out of the SS system. However, it is important to the program that everyone participates just as it is for everyone to participate in the Affordable Care Act.
You cannot tax someone though and then turn around and tell them they can’t receive benefits. It won’t fly and will end up in court. So the idea, that people making more than the maximum would be required to pay in but then would not be able to receive benefits won’t fly. It won’t fly in the court of public opinion and it won’t fly in the courts.
What we need is what I like to call Benefit equalization. This term polls very favorably. It would work something like this. Currently there are 3 levels of Social Security. There is early retirement that pays the least. There is regular retirement age and then there is late retirement that pays the most. People that pay SS tax on 100% of their wages, in other words they make less than the maximum contribution) would still be qualified for all three levels. However, if you pay SS tax on less than 100% of your income you would only be qualified for one or two levels depending on your income. For instance people who pay SS tax on less than 100% but more than 50% would be eligible to receive benefits for early retirement and regular retirement. People who pay SS tax on 50% of their income or less would only be eligible to receive early retirement benefits no matter what age they retire. This would only require one additional line of code to currently modify the SS program. This would allow rich people who only pay SS on a small part of their income to still receive benefits but they would not receive the same benefits as someone who pays SS on 100% of their income because a) they don’t need the same benefits and b)they didn’t pay the same percentage as others.
This is a fair equalizer of benefits. It is easy to explain and easy to understand by a public which sometimes doesn’t always get it. But Dems need to make certain they call it benefit equalization not means testing.
These suggestions are workable and reasonable to the American public. They will go over better if Congress would remove marijuana from the controlled substance list because the public will then understand that Congress is doing EVERYTHING possible to bring down the debt. But the cut and slash ideology of the GOP to cut everything that poor people rely on while spending more than the rest of the world on Defense doesn’t play well with the American People. Dems have the ability to take back Congress in 2014. If they want a big turnout they really need to take up all these issues, especially the marijuana one.