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Social Security debate heats up The improved financial state of Social Security and Medicare has failed to quiet Bush administration calls for reforms or Democrats' fears that the surpluses in the retirement programs might be used to fund the president's proposed tax cuts. If anything, a government report yesterday extending the solvency of the two programs has intensified the debate. "We have to make hay while the sun shines," said Sen. Chuck Grassley, R-Iowa, backing the president's call for sweeping overhaul of the programs despite reports extending the dates they'll run out of cash. "We should build on the progress we've made," said Senate Minority Leader Tom Daschle, D-S.D. "Unfortunately, President Bush's budget does the exact opposite." Ongoing debate: The debate continues today with a joint House and Senate hearing on the trustees' report. Social Security's trust funds won't run out of cash until 2038, a year later than earlier estimated; the Medicare hospital trust fund won't be exhausted until 2029, a four-year extension from last year's estimate, said the trustees, who include three Bush cabinet members. However, the programs, now running huge surpluses, face financial trouble with the pending retirements of the baby boom generation -- Americans born between 1946 and 1964. The president wants Congress to ensure the programs' financial health by bringing in private competition. In particular, Bush wants his long-term overhaul to prevail over efforts to add a politically popular prescription drug benefit for all of Medicare's 39 million elderly and disabled recipients without revamping the underlying program. No 'radical' changes: Sen. Edward Kennedy, D-Mass., a top Democrat on the Senate Health, Education, Labor and Pensions committee, said the currently flush program can sustain new drug coverage for all participants this year without "radical changes to the underlying Medicare program." "If we enact vast tax cuts before a budget is in place then we risk not having the resources there for Social Security when it needs them the most," said Rep. Charles Rangel, D-N.Y, the top Democrat on the tax-law-writing House Ways and Means Committee. Both Social Security and the Medicare hospital trust fund will start taking in less in payroll taxes than they can pay out in benefits beginning in 2016, dipping into the trust funds. But for the fourth consecutive year, the trustees' report extended the dates in which they would run out of cash entirely. The non-hospital part of Medicare is financed by beneficiary payments and general tax revenues. Economic problems: The vibrant economy that allowed for the growth, however, now is sputtering. The slowdown, coupled with rapidly rising health care costs, prompted a challenge to Congress. "It's time to quit the posturing and time to reform the systems," the president said yesterday. He wants sweeping changes that would give Medicare recipients choices that include private medical insurance with premiums paid by the government. Such competition would save the government money and offer participants new benefits that Medicare currently doesn't offer. Bush says an immediate drug benefit for the program's neediest seniors could come out of current surpluses until Congress enacts changes the program to include the competition with private plans that offer prescription drug coverage. Social Security, which pays a guaranteed benefit to 45 million Americans each month, can be protected from financial doom by personal investment accounts, Bush has said. The plan, which would encourage workers to buy stocks and bonds to build up their retirement nest eggs, will be studied in the next few months by a task force Bush is creating. Pending that report, Congress is not likely to act anytime soon on Social Security, which is meant to provide for retirees, the permanently disabled and survivors of workers who die young. |
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