Why Is the GOP Fussing Over Social Security? Medicare Is the Real Problem

Social Security is fine through 2037, though you wouldn't know it from listening to the Republican presidential field. Not so Medicare.


If the first two Republican debates are a sign of what we can expect in the next six, we're in for weeks of Groundhog-Day-like wrangling over whether Social Security is unconstitutional, a fraud, a Ponzi scheme, broken, bankrupt, criminal or a "monstrous lie." All of that exaggerates the problems of the system and obscures what candidates should really be talking about, which is Medicare and its threat to the nation's finances.

Mitt Romney thinks he's found the road map to the nomination in what he calls Rick Perry's "frightening" writings on Social Security. But he knows which program is the real problem. "If we make no changes to the current system, payroll taxes would have to increase by 40 percent to meet our Social Security bill in 2040, but the increase to meet Medicare costs in two decades would be a staggering 250 percent," Romney said last year in his book No Apology.

In a CNN poll this month, 55 percent agreed that "Social Security's problems are serious and can be fixed only with major changes to the current system" while another 12 percent said "Social Security's problems are so bad that the system should be replaced." That's fully two-thirds on the very-worried-to-completely-hopeless spectrum.

Yet Social Security is not, repeat not, in crisis. The nonpartisan Congressional Budget Office and others project that if we continue exactly was we are, retirees will receive full benefits through 2037. After that, if nothing changes, payroll taxes collected from the workforce would cover 78 percent of benefits.

That gives us 26 years to tweak the system, assuming we want to preserve it, and everyone knows what the choices are: Raise the percentage of income that's subject to the payroll tax, raise the retirement age for at least some people, change the formula for calculating benefits for the wealthy or for everyone, allow voluntary private accounts. All of these steps pose difficulties from a political standpoint, but they would not necessarily inflict unbearable burdens on future seniors.

It is Medicare that will break the bank, Medicare that is much harder to fix, and Medicare politics that have tied both parties in knots.

President Obama tried to "bend the cost curve" downward on Medicare in his new health law by shaving $500 billion over 10 years from future reimbursements to doctors, hospitals and "Medicare Advantage" programs, the private alternatives that have proved to be more expensive than regular Medicare. He and his party were thanked with a rout at the polls last year. Adding insult to injury, almost every Republican in Congress -- including Michele Bachmann -- voted this year to approve the very same cuts when they voted for the GOP budget drawn up by Rep. Paul Ryan.

That hasn't stopped the entire field from attacking Obama on those future cutbacks. Bachmann has repeatedly said that Obama "stole over $500 billion out of Medicare to switch it over to Obamacare." (Mostly false, Politifact ruled, because some of it goes for new Medicare services and none of it was "stolen").

The politics of Medicare continue to evolve. Democrats won a special House election last spring using the Ryan plan to privatize Medicare as a cudgel against Republicans, but that line of attack didn't work against conservative Bob Turner, who staged an upset this week in the Brooklyn-Queens district long represented by Democrats Anthony Weiner and Charles Schumer. Obama meanwhile will further muddy the issue with proposals for more Medicare cuts, though his party may still be able to draw a bright line over GOP support for switching seniors from government-run Medicare to the private market.

Moderator Wolf Blitzer tried in the CNN-Tea Party Express debate to get candidates to discuss their own plans for Medicare. That led to some extremely abbreviated responses ("Restructure Medicare," Herman Cain said) and to a disproportionate focus on waste, fraud and abuse. "The federal government is such a bad manager of money, that somewhere between $70 billion and $120 billion a year in Medicare and Medicaid is paid to crooks," said Newt Gingrich. "We wrote a book several years ago called 'Stop Paying the Crooks.' I thought it was pretty obvious even for Washington." Perry said he had saved $5.3 billion "just by finding the waste and the fraud in Texas state government. I'm thinking there might be more waste and fraud in the federal government than even there is in the Texas government."

Waste, fraud and abuse are in fact obvious to Washington, and the Obama administration is not ignoring "the crooks." So far this month, on Medicare alone, officials announced the arrest of 91 people for alleged false billing schemes totaling nearly $300 million, and said the Medicare Recovery Audit Contractor program is on track to recover some $670 million in taxpayer dollars this year -- up from $75 million last year.

All well and good, and utterly inadequate. The federal government spent $502.3 billion on Medicare in 2009. As Romney correctly said, "We're not going to balance the budget just by pretending that all we have to do is take out the waste." His Medicare proposal in the debate was as brief as Cain's: Get it on "a sustainable basis" for future beneficiaries.

The question of course is how, and the answer from most of the candidates is the Ryan plan -- that is, privatizing the program. Rick Santorum calls it "Medicare that you choose" as opposed to "government-run, one-size-fits-all" Medicare. That means seniors would choose their own insurance on the private market. Santorum says that's not "throwing grandma off a cliff." No, but even throwing grandma off a small step could cause damage at that age. He says he trusts grandma to purchase the care that's best for her. That too is problematic.

Many senior citizens may not feel qualified to weigh the relative merits of complicated health plans; others may not want that responsibility. And many insurance companies may not want them as customers, given the array of medical problems most people accumulate by the time they are eligible for Medicare. Not least, the CBO projects that people's out of pocket costs are likely to outrun the federal subsidies or vouchers the Ryan plan would offer to help them buy the private policies.

There's also the logical inconsistency of wanting to give the elderly a choice of private plans while insisting that "Obamacare" -- which will do exactly that for the non-elderly starting in 2014 -- is socialism and must be repealed. That's a related can of worms and it should be pried open repeatedly at upcoming debates.

So how exactly would the candidates change Medicare? Would they let Medicare Advantage plans continue to charge more and make U.S. taxpayers foot the bill? How would they mitigate the problems privatization might create? If they successfully repealed "Obamacare," would they try to add back the law's new Medicare benefits, such as free preventive care? Would they reinstate the law's many pilot programs aimed at cutting Medicare costs by improving care and streamlining payment systems? How would they make sure costs don't surge out of control as medical techniques advance and Baby Boomers flood the system?

It would take an entire debate for Republicans to tell us where they think Obama is going wrong on Medicare and what they'd do instead. They should have it. Because unlike Social Security, the future of Medicare really is cause for alarm.

Image credit: REUTERS/Jason Reed