Unless things change, this will be the last year for Medicare as we've known it, owned and operated by the people. And even before his inauguration, the president has begun his campaign to privatize Social Security. So I propose we begin this crucial New Year with a resolution to reach some understanding of one of the fundamental principles that is at stake in both these programs: the link between the nation's young and old.
This column has dealt with the nuts and bolts, pros and cons of the nation's social insurance structure - Medicare, Social Security and the private pension/retirement savings system that the older generations have come to know and rely on. I'll focus on the foundation of these plans today, and next week I'll have more to say about the opening of a historic national debate on Social Security.
But, as repeated polls indicate, adult children are generally too preoccupied with their daily lives to know the details of these programs, except that they are important for their parents' well-being. Polls also indicate that younger Americans have hopes, but not much faith, that the social insurance system of their parents will be there for them.
That's a reason why they are receptive to the administration pitch that the programs need reform.
As this new yearunfolds and the debate rages over the programs' future, I hope older and younger Americans learn not only of the practical importance of these national monuments of social justice, but of their special role in melding the generations as well.
The intergenerational nature of Social Security and Medicare is often overlooked in debates about their future. But in the creation of Social Security and, later, Medicare, the legislation recognized the principle that each generation of Americans shall support the programs their elders depend on for their health care and security (although Medicare is partly financed by its beneficiaries).
One obvious reason is that the young, if they're lucky, will one day have access to those same programs supported by their children. And these programs relieve the young from paying out of pocket for their parents' care. But beyond those practical reasons, there is a moral imperative for the younger to care for the older through their government. It's the right and civilized thing to do.
Just as we are one nation, in which Texas taxpayers support the New York subways and New Yorkers pay to maintain the Houston Ship Channel, so we are one continuing society, in which each generation depends on and cares about the other. Despite extensive publicity on aging issues, the alleged crisis in Social Security and Medicare costs, a November survey by AARP found that there was "little evidence of intergenerational conflict." And the young favor the continuance of both programs.
But conservative critics of Medicare and Social Security seem to be doing their darnedest to manufacture conflict between the generations. Instead of celebrating that we're all living longer, Third Millennium, a group of fiscal right-wingers who cry wolf about the gray peril, would have us believe hordes of selfish aged are bankrupting the nation with their programs.
The group's president, Richard Thau, wrote opposing a prescription drug benefit because, he said, it would only add to the problem of impending bankruptcy. He figured Medicare will run a "cumulative" shortfall of $333 trillion and cost more than 8 percent of the gross domestic product in 2075. But older Americans are unconcerned, he asserted, because their kids and grandchildren will inherit the burden.
He did not figure the "cumulative" 75-year cost of the recent tax cuts, or the "cumulative" budgets for the Pentagon over 75 years. But Thau has used these huge cumulative numbers to argue that "young adults don't want Uncle Sam to stock the medicine chests of wealthy seniors," which he defines as families earning more than $30,000 a year.
Thau and other conservatives would therefore limit access to Medicare or prescription drugs by means-testing premiums for middle-class families, which is included in the new Medicare law (for families with incomes of $80,000). And it offers prescription drugs only through private insurers, a move intended to attract the young away from original Medicare.
Inevitably, original government-run Medicare is to become an underfunded program for the old, the poor and the sick. Younger, healthier, more affluent beneficiaries will seek private insurance. The bonds of the generations will have been broken with the loss of Medicare's universality, and with the same benefits no longer available to every beneficiary.
On Dec. 10, when President George W. Bush spoke on the future of Social Security, the Washington Post noted that he and his spokesman used the word "problem" 39 times in describing the pension system - to set the stage for solving the "problem" with privatization. The young, the president says, should have the option of investing part of their Social Security taxes in private accounts.
Leaving aside how it's to be done, how much it will cost, whether some benefits will be cut and whether it's necessary at all, there is a more fundamental problem. As the National Bureau of Economic Research says, Social Security systems such as ours "are devices for sharing the income risks of elderly people with others." But during the transition, older workers will experience significant loss as the young invest instead of contribute. And when, at last, all Americans are taking their retirement chances on the market - some winning, some losing - what will remain of "sharing the income risks" among the generations?
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