EDITORIALS
Obama faces old challenges
Social Security, Medicare reforms still must be tackled by government
To be sure, entitlement reform is not the most urgent matter on President Obama’s agenda as he settles into office, but without attention, it will become that.
With each passing year, Social Security and especially Medicare come closer to insolvency. As more and more baby boomers retire, the country is left with fewer taxpayers to support more beneficiaries.
This is not new. Trustees have long foreseen the problems. In 2011 — just two years from now — Social Security will begin taking in less money than it pays out. Without action, the program’s reserves will be depleted by 2041. Medicare will be insolvent by 2019.
Theoretically, Washington should have attended to this problem already, but it is almost certainly better that it didn’t. The reason is the programs’ putative reformers came to the task with unclean hands.
Former President George W. Bush put entitlement reform at the top of his second-term agenda, but neither he nor the Republicans who then controlled Congress could have been considered friends of Medicare or Social Security. Many on the political right would have been delighted to see the programs die. Their inability to muster the political strength to “reform” the programs may well have saved them.
Now, with program-supportive Democrats controlling the White House and Congress, the country can have greater confidence that the people pursuing these painful reforms at least recognize the value of Social Security and Medicare to millions of older Americans. But no one should doubt that changes will be difficult. Benefits could be reduced, or a means test imposed, or retirement ages raised. Any or all of those possibilities — or others — could occur as Washington comes to grips with the arithmetic of entitlements.
For now, Obama appropriately plans on emphasizing the country’s immediate economic crisis, engineering with Congress a stimulus program worth $800 billion or more. But he is not putting entitlement reform on a shelf. He has announced plans to convene a “fiscal responsibility summit,” dealing with entitlements and budget deficits.
That’s a smart move, because little that he will do domestically will be as sensitive as reshaping Medicare and Social Security. He needs to move while his popularity remains high. That period could last throughout his first term, but earlier is liable to be better, for him and for the country.
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