Parties divided on entitlements

GOP and Democrats disagree on the urgency of addressing the long-term solvency of Social Security and Medicare.

By Linda Feldmann | Staff writer of The Christian Science Monitor

from the October 29, 2007 edition

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WASHINGTON - As baby boomers enter the starting gate into retirement, the cost of America's entitlement programs – foremost, Social Security, Medicare, and Medicaid – is projected to balloon to levels that are unsustainable.

Already, those three programs make up 40 percent of the federal budget. If reforms are not enacted, Social Security will eventually go bust; in 40 years, on the current path, the two medical programs alone could equal the size of today's entire federal budget according to the US Government Accountability Office.

Experts tend to agree on the projections, but is it a crisis? In the hyperpartisan atmosphere of the 2008 presidential campaign, the topic of entitlement programs is also a matter of dispute between parties. Former Sen. Fred Thompson (R) of Tennessee, the most impassioned candidate on entitlement spending, suggests that it's the nation's most important domestic problem – and, alone among the top-tier Republican candidates, is willing to take the risky step of discussing cuts in benefits. Most Republicans stick with the safer position of saying what they won't do – raise taxes – or proposing a new commission to study the problem. The Democratic candidates call entitlement spending a long-term challenge, and assert that there's plenty of time to work out a solution. They tend not to bring up the subject on the stump, but when asked, they repeat their opposition to the "privatization of Social Security," a refrain from the days of President Bush's ill-fated effort to make private accounts a part of the program.

"Democratic voters are not at all convinced that there's a problem, because they believe in many ways that this is something that was kind of contrived by the administration in an effort to privatize the system," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "They see people using crisis rhetoric as a big exaggeration."

And so, she says, Democratic candidates tend not to stick their necks out by making proposals.

Sen. Hillary Rodham Clinton (D) of New York has not issued a plan, because "we don't have a crisis in Social Security," she told the Boston Globe recently. "We have a long-term solvency challenge we can meet if we're smart about it."

After missing the AARP forum for Democratic presidential candidates last month, Sen. Barack Obama (D) of Illinois laid out his ideas on retirement security in an Iowa newspaper, the Quad City Times. Even though the Social Security system is "not perfect," the piece said, the problem is "relatively small and can be readily solved."

He then said he would "fight against efforts to privatize Social Security" and would not cut benefits or raise the retirement age. He also discussed the possibility of removing the cap on Social Security taxes. "If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,500, we could virtually eliminate the entire Social Security shortfall," he said.

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