It should come as no surprise that two of the nation’s major entitlements — Social Security and Medicare — are heading for disaster. Observers inside and outside of the government have been sounding the alarm for decades.
In the next six years or so, both programs are projected to be insolvent, unable to meet their full obligations. Unless something is done, Social Security benefits will be reduced by a quarter, and health-care providers will see further cuts in Medicare payments, making treatment of the nation’s senior citizens less profitable than it already is.
The Washington Post this week succinctly explained how we got to this point.
Longer lifespans, declining birth rates and immigration crackdowns have combined to extract greater outlays from those two entitlement programs while providing a proportionately smaller working population to foot the bill.
By 2030, one in five Americans will be 65 years old or older, a roughly 60% jump in two decades. That same year, there will be just 2.5 working-age Americans for every senior — a decline of almost 60% since 1952.
This can’t go on.
There are various reforms that could be enacted. For example, Social Security could be means-tested, so that those who can live without it might get a reduced share. Medicare could stop covering outpatient prescription drugs, a benefit that was added 20 years ago despite its long-term unaffordability.
None of this would be painless. But it’s either that, hiking up the payroll taxes on employees and employers, or driving the nation over the cliff in debt.
