For the Record: Entitlement reform — the third rail
Editor's note: An earlier version of this newsletter misstated Clinton's position on the Social Security payroll cap.
Entitlement reform is like bubble-gum flavored penicillin: You know you have to take it to get better. But ugh. It tastes terrible. And even mentioning it produces a gag.
In that case, it’s the perfect issue for this presidential election (and today’s where-they-stand-on-the-issues edition of For the Record).
The problem
We’ve been warned since we were kids that Social Security and Medicare are completely unsustainable. There are too many Baby Boomers retiring and not enough young workers paying into the system to keep it afloat. The Social Security trust fund is set to run out of money in 2035; Medicare in 2028.
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That doesn’t mean both will implode and all benefits will be sucked into a black hole. But those are the dates when both funds will be unable to pay full benefits to everyone who has earned them. Even worse, absent any reforms, the percentage of the federal budget devoted to these programs will continue to grow, shrinking what's left for other important things, like infrastructure repairs, education and research.
Where they stand: Social Security
You’d think given House Speaker Paul Ryan’s constant crowing about the need for reform – and the collective groan in Congress any time fixes are uttered – that Hillary Clinton and Donald Trump would be far apart in their approaches to fix Social Security. But that’s only sort of the case.
Both candidates have said they oppose raising the retirement age and cutting cost-of-living increases, which some Republicans have said are necessary to shore up the system. In fact, Clinton has said that not only will she not cut benefits, but she’d also like to expand them for caregivers and widows.
Clinton says she can make the program solvent by making people who bring home more than $250,000 pay the full amount into Social Security (anything above $118,500 is capped now). The Social Security Administration estimates that will fix a majority of the shortfall, as long as the program isn't expanded.
Trump’s stance is less detailed and equally questionable. He says the fix lies in ridding the program of waste, and bolstering economic growth through tax reform and new trade deals. But critics say neither would be enough to actually make things solvent.
Where they stand: Medicare
Clinton has bigger changes in store for Medicare. She wants to change the rules so people can buy into the system at 55 (it’s 65 now), allow Medicare to negotiate prescription prices and bundle payments for multiple providers involved in care, instead of the current a la carte billing we do for services provided.
Trump’s plans are less clear. His policy advisers have sort of hinted that he’d be willing to cut benefits. And Trump has also hinted that he’d also like to negotiate prescription drug prices.
But Trump has also said that he’s not about to follow the Republican talking points on reform. And his website makes no mention of Medicare (or Social Security, for that matter – all we know is what he’s mentioned in speeches). So … good luck.
Third-party views
Libertarian Gary Johnson doesn’t want retirement planning to be a function of government and eventually would like to phase out Social Security (his flat-tax plan eliminates the Social Security deduction from paychecks). In the meantime, he’s for raising the retirement age and allowing retirees to put their contributions into private savings accounts (two ideas touted by some Republicans but rejected by Trump).
Johnson’s Medicare plans are less specific, but he has touted turning the program over to the states.
Green Party candidate Jill Stein wants to eliminate the Social Security payroll cap (instead of Clinton’s plan to simply raise it), so people with higher incomes are paying the full amount into the system. She also would open Medicare to anyone as part of her single-payer health-care plan.
The bottom line
With cuts off the table (unless Johnson miraculously wins) and no appetite from the people or Congress to do anything big, entitlement reform is pretty much DOA. So, in essence, this whole discussion is moot point until 2023 rolls around and retirees mount some sort of resistance. Either way, neither Clinton nor Trump have proposed anything to fix the problems, and reform will remain the third rail of politics for a few more years.
More from the campaign trail
- With prospects improving, Trump returns to Wisconsin; Ryan, Walker busy doing other things (Milwaukee Journal Sentinel)
- 'It’s borderline lesser-of-two-evils for me, but I support Trump' (Des Moines Register)
- After Arizona Republic breaks GOP-backing tradition, conservative readers break paper-subscribing tradition (USA TODAY OnPolitics)
- Gary Johnson's favorite foreign leader? The former Mexican president ... you remember him, that Mexican guy (USA TODAY OnPolitics)
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