The Silver Boom: Will Entitlements be There for Future Retirees?
A Brown University PhD student in epidemiology, Beth Lacy, is 28 years old. That means she’s a long way from retirement and plans to be working for decades to come. But the debate over the future of Medicare and Social Security is on Lacy’s mind even when she makes one of her regular coffee stops at the Cable Car Café in Providence.
“Is is something I think about,” she says. “It’s not something that necessarily keeps me up at night. But just because of the world I’m in with work – public health – I definitely think a lot more about Medicare than Social Security.”
These federal programs aren’t just an abstract concept for Lacy. She says Medicare and Social Security have been a saving grace for her family due to the declining health of her grandparents. Lacy thinks federal programs created to help the elderly during the New Deal and the Great Society eras remain important.
“My personal view is that we need these government programs,” she says. “I think that there are other areas of the budget that should be cut before programs such as Social Security or Medicare should be cut. As you move through society and get older you should be able to rely on the fact that there’s something there to support you.”
The extent to which Medicare and Social Security will be there to support future retirees is a subject of growing political debate. That’s because a huge demographic increase of retiring baby boomers will dramatically ramp up the cost of the two programs. They’re the two largest government programs and in fiscal 2011, Medicare and Social Security accounted for 36 percent of government spending.
“How you get Medicare, and why you get Medicare and when you get Medicare has to be revisited,” says Mark Zaccaria, the outgoing chairman of the state Republican Party. He’s familiar with the federal entitlement debate after making two unsuccessful runs for Congress. Like many Republicans in Congress, Zaccaria sees Medicare and Social Security as symptoms of out of control federal spending. He says the disconnect between what the government takes in and what it spends could eventually destroy the economy.
“You know, I hate to be a prophet of doom, but if you keep spending on your credit card in your own personal budget with no regard to paying for it or anything like that, they’ll cut you off,” Zaccaria says. “Or all of a sudden when it comes time to pay your electric bill or your food bill or something like that that’s really important, you’re not going to be able to do that.”
On the other side of the partisan aisle, Democratic Congressman David Cicilline made his opposition to Social Security and Medicare cuts a focal point of his successful re-election campaign last year. Like most Democrats, he calls Medicare and Social Security part of a social contract between the government and its citizens.
“These programs were created because they reflect our values as a country, that we wanted to ensure when you reach a certain age in life that you can be guaranteed to meet your basic needs through Social Security and live with dignity,” Cicilline say. “And we created Medicare because we decided as a country that when that when you reach a certain age, you should be guaranteed access to quality affordable healthcare and those reflect really important American values.”
An annual report by trustees of the two programs calls for Congress to tackle the financial challenges facing Medicare and Social Security as soon as possible. Acting sooner, they say, will leave more options and allow the public adequate time to prepare. Most observers agree that strengthening Social Security is simpler than doing the same for Medicare.
Yet continuous gridlock in Washington raises questions about Congress’ ability to craft solutions even though these programs have broad public support.
Find a group of seniors and you’re likely to find someone unhappy with previous cuts to safety net programs. Sitting in a booth with friends at the Dunkin’ Donuts on Smith Hill, Mary Fallon shared her view while having coffee on the value of Medicare and Social Security.
“I feel they’re important,” Fallon says, “because of a lot of people retired and they’re dependent on these things. Besides, we paid into this all our lives and they have cut a lot of things. I still see a lot of cuts coming.”
The latest GOP budget unveiled this week does include a controversial proposal to replace Medicare’s guaranteed benefits with a voucher that can be used in the private insurance market. It’s an approach they’ve rolled out before. It emphasizes the Republican focus to reduce costs by cutting expenses and benefits.
By contrast, Democrats like Cicilline favor strengthening Social Security by increasing how much some of the wealthiest Americans pay into the program. Cicilline says reducing the cost of healthcare is the way to shore up Medicare.
“The real answer is to recognize it’s not Medicare that’s the problem,” he says. “It’s the healthcare system. Reform that and fix that so we can provide every American with access to quality affordable healthcare.”
The cost of Medicare and Social Security will continue to spike as baby boomers retire in big numbers in the years to come. With few signs of compromise in Washington, the question remains whether Congress will be able to defuse this ticking fiscal time bomb before it’s too late.
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You can find all of the stories in this series here: The Silver Boom: Aging in Rhode Island
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