A looming boom of doom
By A TIMES EDITORIAL
Published October 12, 2007
Kathleen Casey-Kirschling is the raindrop that will start a flood. Recognized as the first baby boomer because of her birth date - one second after midnight on Jan. 1, 1946 - Casey-Kirschling said she will apply for her Social Security check soon (she's eligible for the early benefit beginning in January), USA Today reported. Following her into retirement over the next two decades will be 80-million more boomers born between 1946 and 1964 who will put an unprecedented strain on Social Security and Medicare.
At the end of World War II, 42 workers were supporting each retiree. Today that ratio is three workers per retiree, and when the boomers have all retired it will shrink to two to one. Because of rising medical costs, Medicare is on even shakier ground. The hospital insurance portion of that program is already dipping into its shrinking reserves, and Social Security will start doing the same in a decade.
A nonpartisan effort called the Fiscal Wake-Up Tour is underway to wake up working Americans to the threat, and a variety of prestigious committees have met in the past and issued dire warnings. Few have listened, particularly those who can do something about it: politicians.
Support for the status quo on Social Security and Medicare has traditionally benefitted Democrats, but that could be changing for those who refuse to address the problem. Sen. Hillary Clinton, the frontrunner for her party's presidential nomination, is particularly evasive on the subject.
There are essentially only three ways to maintain the financial stability of the current Social Security program: raise the retirement age, cut benefits and/or raise payroll taxes. Clinton has inexplicably ruled out all three. That position runs counter to, among others, her husband when he was president.
In 1998, after spelling out the realistic options for extending the life of Social Security, President Clinton said: "Every single year we avoid resolving this, it will get harder and harder and harder." Put Hillary Clinton in the camp of the avoiders.
Other presidential contenders have shown more courage. John Edwards has proposed a payroll tax surcharge on incomes over $200,000 to build up reserves. Currently, workers pay the tax on income up to $97,500 and nothing after that. By setting the surcharge threshold at $200,000, Edwards would avoid some of the regressive nature of the payroll tax. Sen. Barack Obama has been wishy-washy on the subject, though unlike Clinton he hasn't ruled out raising the payroll-tax cap.
Republican candidate Fred Thompson has come out with the boldest plan to shore up both Social Security and Medicare. Though his proposals will turn off many voters, Thompson had the nerve to propose painful fixes. He would scale back or end the Medicare drug benefit. "I know this probably isn't a real popular thing to say, but we couldn't afford this prescription-drug bill," Thompson said.
As for Social Security, he would slow the growth of benefits and reduce the rate of future cost-of-living adjustments. While the nation can afford the current retiree benefits, "we can't afford more," Thompson's economic adviser Lawrence Lindsey told the Wall Street Journal. Maybe Thompson is just trying to polish his conservative credentials, but he is accurately expressing the urgency of the situation.
Don't expect such straight talk from Clinton. She would have Americans believe they can have their cake and eat it too, and not gain weight. With the baby boomers now starting to retire, voters should demand something more than the empty calories of hypocrisy on Social Security and Medicare.