Senator Rob Portman (R–OH) proposed reforms to Social Security and Medicare in The Wall Street Journal last week.
Reforms to both programs “can not only help close the debt, it can also create a stronger economy,” Portman argues. He specifically proposes “adjusting Social Security and Medicare’s retirement ages, means-testing benefits for upper-income retirees, and supporting broad-based, patient-centered health care.”
His ideas for change come at an important time, as recent reports from the Congressional Budget Office and the Social Security and Medicare trustees highlight the need for reforms in both programs. Congress has been slow to act or even debate these popular and increasingly expensive programs. This general apathy has been exacerbated because it is an election year.
These common-sense changes would help solve the nation’s worsening debt crisis, which in large part stems from the explosion in mandatory spending.
The dire fiscal situation facing both Social Security and Medicare has been well documented. Demographic changes play a big role. Currently 10,000 baby boomers retire every day, fueling spending on entitlement programs. In 1950, there were 16 workers contributing to Social Security for each retiree. Today there are fewer than three workers per retiree.
The Heritage Foundation has put forth similar proposals to reform the two programs. Heritage’s Romina Boccia writes, “Reforms are urgent today to strengthen benefits for Social Security’s most vulnerable populations without burdening younger working generations with a higher debt and tax burden.”
She recommends increasing the retirement age and better targeting benefits. Increasing the retirement age gradually and predictably would reflect Americans’ increase in life expectancy and extended ability to work. Targeting Social Security benefits toward seniors who truly need them would allay any concerns of an impoverished retirement while also enhancing fiscal responsibility and encouraging Americans to provide for a greater share of their own needs in retirement.
Heritage senior fellow Robert Moffit has argued for reforming Medicare and giving seniors the ability to choose health plans. Allowing broad consumer choice forces health plans to compete directly for enrollees’ dollars. This competition could lower premiums, improve coverage and quality, and sustain Medicare.
The common-sense and bipartisan reforms mentioned here should be implemented now. By acting soon, Congress would protect older and future Americans from poverty in retirement.
Caleb Zimmick is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, pleaseclick here.