As at least some people in Washington struggle with the deficit and what to do with various entitlement programs, there was, a couple of weeks ago, a fascinating exchange, at least in the media, between Republican Representative Paul Ryan, chairman of the House Budget Committee, and Senator Bernie Saunders of Vermont, an independent who calls himself a democratic socialist and who caucuses with the Democrats.
According to Representative Ryan, “Means-testing is an obvious solution to our fiscal problems. The alternative is everybody gets cut, so why don’t we put the money where it should go -- to the people who need it.”
Senator Sanders, on the other hand, doesn’t agree. “The strength of Social Security and Medicare is that everybody is in. Once you start breaking that universality and you say that if you’re above a certain income, two years later that income goes down and 10 years later it becomes a welfare program.”
I don’t know if we can afford Senator Sanders’ position, but I understand his point. Means-testing could turn Social Security into just another welfare program.
On the other hand, those who favor some kind of means-testing for social security and Medicare, argue like Democratic Representative Steny Hoyer of Maryland: “I don’t adopt the premise that you’ve got to treat Ross Perot the same as Mr. and Mrs. Jones, who are making $40,000 a year.” And Karl Rove: “When he start receiving Medicare, Bill Gates should bear a greater share of his healthcare costs than the less healthy or less wealthy.” And finally, Senator Dick Durbin of Illinois: “We have to acknowledge that some in the highest-income categories, frankly, can take care of themselves.”
The problem with these comments is that, when you start to look at them, you realize how similar they are to proposals to balance the budget by taxing the rich. And just as you can’t solve the deficit by taxing the rich (because the money’s not there), you can’t solve Medicare’s problems, or ensure Social Security’s solvency, by cutting benefits for Bill Gates and Ross Perot – or even the people “in the highest-income categories”.*
To solve the problems of Social Security and Medicare by means-testing, you need real money. To get at real money, you have to go to at least some part of the middle class. And if you do this, people are going to be surprised how low those “highest-income categories” wind up going. I’m not saying it shouldn’t be done. I’m just saying we need to understand what such proposals really mean and not hide behind references to Bill Gates and Ross Perot.
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* This is not to say that you shouldn’t restrict certain benefits for the really rich. Just because the money is small, is no reason not to do it. Every little
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