WASHINGTON — The Concord Coalition today applauded President Clinton’s
decision to produce a Medicare reform plan this year and urged him to combine
his Medicare proposal with specific Social Security reform options that
Congress can consider as a total retirement security package.
WASHINGTON — The Concord Coalition today applauded President Clinton’s
decision to produce a Medicare reform plan this year and urged him to combine
his Medicare proposal with specific Social Security reform options that
Congress can consider as a total retirement security package.
"Conventional wisdom seems to be that the issues involved in Medicare
and Social Security reform are so daunting that they must be dealt with
separately," said Concord Coalition Policy Director Robert Bixby. "But they are
closely related pieces of the retirement security puzzle. Logically, reforms of
the two programs should be packaged together rather than viewed as if they were
unrelated."
Concord emphasized that the challenge of preparing Medicare and Social
Security for the 21st century cannot be met simply by relying on hoped-for
budget surpluses. Structural changes will need to be made in both programs to
ensure that they provide retirement security in a fiscally and generationally
responsible manner.
"The President can demonstrate bold leadership this year by
offering the
nation a comprehensive retirement security proposal instead of piecemeal
Medicare and Social Security options," said Bixby. "Dealing with these programs
separately does not alter the fact that neither one is fiscally sustainable in
its current form. While reforms may seem easier if considered in isolation,
this is an illusion. What really matters is whether the total Medicare and
Social Security benefits package is adequate, equitable, and affordable over
the long-term."
According to the 1998 Social Security and Medicare Trustees’
Report, the
combined operating deficit for Social Security and Medicare Part A (hospital
insurance) in 2030, when today’s children will be entering their prime working
years, will reach an inflation-adjusted $414 billion. A payroll tax rate of
almost 24 percent — almost double today’s rate — would be required by that
year to pay currently projected benefits. That figure does not include Medicare
Part B (supplemental medical insurance) which is 75% subsidized by general tax
revenues. That subsidy, which amounted to $57 billion in 1998, is projected to
rise to an inflation-adjusted $312 billion in 2030.
