The Washington Post calls out Democrats on their inability to address entitlement reform in today’s editorial. After noting that Congress has shown signs of backing away from the containment of health-care inflation for the third year in a row, they puzzle over Democratic resistance to means-testing for Medicare:
The second announcement was that the richest 4 percent or so of retirees will face steep increases in Medicare premiums. Until now, all patients have paid a premium equal to 25 percent of the value of the benefits that the average retiree receives. In the future, the most affluent will pay more, though they will still be paying less in premiums than they take out in benefits. This modest reform, which won’t affect the premiums 96 percent of retirees pay, is expected to raise an extra $20 billion for Medicare over the next decade. That’s a fraction of the program’s long-term funding shortfall, but it’s still worth having.
That’s not the way some Democrats see it, however. Rep. Nita M. Lowey (D-N.Y.) is pushing a bill that would repeal the higher premiums, arguing that rich retirees should not be hit with increases because they have already contributed generously to Medicare via higher taxes. This is like arguing that the tax code is in danger of becoming too progressive — a strange position for a Democrat. Ms. Lowey also worries that premium hikes may be extended to a broader swath of retirees, perhaps even to those with incomes of $30,000 or $40,000. That might raise harder questions. But we are not there yet, and it’s worth remembering that retirees with that sort of income still are among the richest third of Medicare beneficiaries.
The entitlement programs are not going to be fixed without some hard decisions. If Democrats oppose modest changes that hit only the rich, how will they find the courage to support far-reaching reforms?
Neither party has made much effort to pursue entitlement reform of late, but at least the Bush administration had the courage to attempt a national dialogue on the crisis facing Social Security. While his partial privatization didn’t win many converts, he told Congress that he would be willing to discuss a wide range of solutions, if they bothered to develop any at all. Republicans in the end could not overcome a refusal from Democrats to consider the issue, as well as resistance from within their own ranks to expose themselves politically on a touchy issue, even in a non-election year.
So while neither political force appears willing to address entitlement reform in a larger sense, the Democrats refuse to address it even in moderate measures intended to incrementally lessen the coming catastrophe. Lowey’s argument reveals entitlements for the Ponzi scheme they’ve become; she refuses to raise the premiums for those most able to pay because they’ve paid enough through higher income taxes, an interesting take regarding progressive tax codes, but one which Democrats might regret later. As the Post notes, the higher premiums still remain less than the benefits it buys, which means that succeeding generations are still subsidizing present-day care, only not quite as much. Lowey wants the deficit to remain as is — because these people are entitled to that level of contribution.
Entitlement programs will go broke over the next couple of decades thanks to this kind of thinking. The available solutions to deficit spending are very limited: either spend less or find more revenue. Lowey refuses to do either, which demonstrates the entire problem with the Democrats on entitlements. Unfortunately, we have no Plan C to address deficits, and the Democrats refuse to adopt either Plan A or Plan B.