By U.S. Senator Kay Bailey Hutchison
Earlier this month President Obama announced his Fiscal Year (FY) 2013 budget proposal. Rather than a blueprint for putting our financial house in order his budget plan would add more than $11 trillion to the national debt in coming years in spite of the nearly $2 trillion in higher taxes that would only serve to undermine our economic recovery.
The Presidents new budget would increase spending for dozens of programs that have been proven ineffective. And it would slash defense spending to unprecedented levels that could put our troops and our citizens at risk. But worst of all President Obama once again ignored our biggest fiscal challenge.
The Social Security and Medicare Trust Funds are on a path to bankruptcy. Social Securitys Chief Actuary estimates that its reserves will run out in 2036 which would mean automatic benefit cuts by about one-fourth in order to keep sending out monthly checks to tens of millions of senior citizens. Medicare is in worse shape with bankruptcy looming as early as 2022.
To ignore all of this is the present day equivalent of Emperor Nero fiddling while Rome burned. Nevertheless in his 7000 word State of the Union address the President devoted 40 words to the Social Security and Medicare programs.
We need and the American people ought to demand a serious bipartisan effort to shore up these two vital programs before it is too late. By making incremental reforms now we can protect retirement and health care benefits for several decades. But endless fiddling by Congress and the White House guarantees huge pain for taxpayers and financial insecurity for tens of millions of senior citizens.
The place to start is Social Security. Americans are living longer healthier lives than when Social Security was first enacted in 1935. If no adjustments are made these huge demographic shifts will exhaust the Trust Funds financial reserves in less than 25 years and big automatic cuts in monthly benefits ($270/month in todays dollars) will be triggered.
Fortunately such a catastrophe can be avoided without taking drastic steps provided action is taken soon. Legislation I introduced last year (The
Defend and Save Social Security Act) illustrates that only modest steps are needed today.
My bill would assure that Social Security remains solvent until 2085 without raising taxes or cutting core benefits. It would do so by gradually increasing the Social Security eligibility age for those who are 57 or younger by increasing the eligibility age three months each year with a cap at 69 in 2027. Additionally under my bill the Cost of Living Adjustment (COLA) would be modified so that any year in which the COLA exceeds 1 percent it would be decreased by 1 percent. However if in any year the COLA is calculated to be less than 1 percent the final COLA would be reduced to zero. For example this years COLA was 3.6 percent so under my bill the increase of 3.6 percent would be reduced to 2.6 percent.
Exactly how to adjust eligibility age and cost-of-living adjustments can be worked out if there is leadership from the White House and a bipartisan Congressional commitment to take responsibility for protecting Social Security now. The same type of timely bipartisan action would assure that Medicare is shored up too.
Social Security Medicare and other mandatory spending programs already account for more than one-half of annual federal government spending. Without reforms all of these mandatory spending programs will grow to more than 75 percent of the federal budget within ten years. Not only would this threaten millions of senior citizens it would leave too little for national defense education research and other vital national priorities.
It is profoundly disappointing that President Obamas last budget proposal before he stands for reelection has all of the weaknesses of his previous ones. The Senate unanimously rejected his budget last year and will probably do so again this year. But rejecting a bad budget plan isnt enough.
Just as Social Security and Medicare were enacted with broad bipartisan support securing and saving these programs requires both political parties in Congress to work together. That is the only way to avoid the politicizing of the issue. Constructive dialogue and debating choices openly will bring us to solutions that are in the national interest.
Hutchison a Republican is the senior U.S. senator from Texas and Ranking Member on the Senate Commerce Science and Transportation Committee.
