Protecting Seniors from the Myths of Social Security and Medicare Insolvency


Testimony to Democratic National Convention Platform Committee, July 30 and 12, 2012
By Robert Weiner, former Chief of Staff, US House Aging Committee under Chairman Claude Pepper

There is no valid reason to cut Social Security or Medicare or privatize either to reduce the national debt. Yet there are serious threats by Republicans to strangle the economic lifeblood of seniors by denying the solvency of Social Security and then using the solvent funds for other purposes.

It's an illusion that cutting Social Security would reduce the deficit. The money seniors have given to Social Security keeps it solvent through 2043, and after that 75 percent funded. To say it will go bankrupt is a propaganda fraud for privatization advocates.

Moreover, that future shortfall is only a blip - a point missed by nearly all media. After the Baby Boomers reap their Social Security benefits, since those Boomers have had the fewest children ever (2.1 per couple vs. the current 2.7 rate), the system will return to full solvency because it will pay benefits to fewer people.

To cut a national deficit by cutting Social Security, which does not have a deficit, is theft from seniors who have paid in. If a bank told a customer, "Sorry. We've spent your money on other items," would anyone accept that or say: "Fine, you made money on my money but you still owe me mine. Pay up." Industry CEOs have a history of wanting to scale back Social Security benefits, and trying to convert Social Security's money to business.

Wall Street wants to benefit from Social Security's money. Will these captains of industry stand up for people who need Social Security the most? Or look for ways to transfer its money to their corporate balances?

Al Gore famously said he would protect Social Security in a "lockbox".

The program remains indispensable in enabling the 38 million senior citizens over 65 nationwide to live their lives in dignity. Without Social Security, nearly half of Americans age 65 or older would be below the poverty line. For two-thirds of the elderly, Social Security provides the majority of their income. For one-third, it provides nearly all.

We need the courage of the late Florida Congressman Claude Pepper. In 1978, when Commerce Secretary Juanita Kreps suggesting raising the retirement age, Rep. Pepper and House Social Security Chairman James Burke ran over for a meeting, and Rep. Pepper said they would "fight it to our death." Ms. Kreps suddenly said the proposal hadn't been drawn up.

There are plenty of other options to cut the deficit. Defense Secretary Robert Gates said the military needed to cut its "gusher of defense spending." Congress could also scale back the Bush tax cuts for the wealthy to the levels they were under President Clinton and could get rid of tax breaks for U.S. corporations doing business overseas. The deficit needs to be cut, but not at the cost of our seniors.

During a 2006 speaking tour, every time President Bush spoke of his plan to privatize Social Security, his approval ratings dropped. His advocacy of cuts helped cost Republicans the Congress. While up recently, the market lost 20 percent since 2000-2010. Voters knew that would have meant 20 percent less food on the table for seniors or money for electricity. We Democrats must not make the same mistake.

Likewise, cutting Medicare benefits would cost the nation.

Republicans say that Medicare benefits are "on the table" in looking to reduce the deficit. Yet the latest polls show 78 percent oppose cutting spending on Medicare.

Medicare not only provides health care to 40 million seniors, but also keeps them from food stamps, welfare, overall poverty, more serious health issues and emergency hospitalization. The nation will pay far more by reducing benefits.

Medicare is not a for-profit venture. It is what our nation does to provide health care to seniors so that health-care costs do no force them into poverty, where millions were before the program began.

According to the Census Bureau, Medicare reduced seniors' poverty rate by over 20 percent it was 30 percent, and today it is 7.5 percent.

As President Lyndon Johnson said when creating Medicare in 1965, "no longer will illness crush and destroy the savings that seniors have so carefully put away."

If seniors must endure smaller benefits, illness once again will crush savings and the poverty rate once again will rise. The more cuts to Medicare, the more people we will push into poverty and social programs. This would hardly help reduce the deficit.

Senator Richard Durbin, D-Ill., the Senate Majority Whip, told us, "We won't allow Medicare cuts without revenue increases." Durbin emphasized that Democrats in Congress would never support the Paul Ryan plan to dismantle Medicare into a voucher program.

However, if the Ryan Plan, which as passed by the House Republican leadership, is the marker cutting Medicare benefits in half, costing average families an extra $6,000, and "voucherizing" Medicare to force seniors to use private insurers to decide when and what illnesses are covered then we understand how Congress has hit an all time low approval of 13 percent.

The public understands that brinkmanship and threats of dismantling our social safety net cannot be a strategy to impose budget "compromise."

Congresswoman Debbie Wasserman Schultz, D-Fla., bluntly stated what cuts would mean for the 17 percent of Floridians who are seniors the nation's highest number and who use Medicare: "No longer would Medicare be a guarantee of health insurance coverage. Instead Medicare would become little more than a discount card. This plan would literally be a death trap for seniors."

Medicare is in a serious condition, but not because of its solvency, which is now eight years longer under the new health care law according to the Congressional Budget Office. The law also saves the Treasury more than a trillion dollars.

The 2011 Medicare Trustees Report stated, "The financial outlook for the Medicare program is substantially improved as a result of the changes in the Affordable Care Act." Yet Congress is threatening repeal. Could politics, not the deficit or health care, be their real priorities?

Despite the claims of some, Social Security and Medicare are not the cause of the deficit. The largest causes of the deficit, according to CBO, are the unpaid wars and Bush tax cuts for the wealthy.

According to OMB, the tax cuts added $3 trillion to the deficit over the past decade. The wars in Iraq and Afghanistan, according to a Brown University study, cost $4 trillion. In addition, revenue lost due to the recession totals about $3.6 trillion.

American values are more than the profit-loss ratio of its programs. Do we insist that fire departments, police, schools, food safety and libraries make money? Medicare's purpose isn't profit, it's seniors' health care. President Obama has said, keep contacting Congress. Our seniors are worth more than the bottom line.

Robert Weiner was chief of staff of the House Select Committee on Aging, chaired by the late U.S. Rep. Claude Pepper, and a senior public-affairs director in the Clinton White House.