A Problem That Only Centrists Can Solve: Entitlement Reform

By Eric Hodge on April 26, 2017

One of the issues that most clearly illustrates the need in our system for a centrist voice is Entitlement Reform. Democrats are stridently opposed to cutting benefits to the elderly and poor. Republicans are stridently opposed to increasing government spending or raising taxes. No compromise has been possible to date.

Still, neither side wants to put grandma on the street when basic demographics take over and Social Security begins to fail (in 2037 according to the Social Security Administration). And neither party wants to leave an insolvent system for the Millennials, but addressing the solution – heck, even speaking up about the problem – is politically untenable for liberal or conservative alike.

George W tried to address the problem as his second term began, by making his first post-election effort the partial privatization of Social Security. That took guts, but it quickly went down in flames (along with his political capital), as the initial costs were seen as too high and Democrats were able to play the “giving-too-much-to-the-corporations” card.

Obama took a pretty courageous shot at it, too, commissioning the bipartisan Simpson-Bowles commission in 2010, which came up with some very sensible proposals to save the system, but within two hours of their release, Pelosi was calling the proposed plan “simply unacceptable” and saying it “put the middle class under siege”, and Paul Ryan led his caucus’ opposition, saying it “was accelerating the adverse consequences of the president’s healthcare law”. The recommendations never got to the floor for a vote.

Simpson-Bowles proposed a gradual increase of the age of benefits from 65 to 67 over the course of 20 years, along with means-testing for Medicare recipients (if you make more, you pay higher premiums), as well as a more accurate equation for fixing cost of living increases to inflation. Separate those proposals from party-identity, and you’ve got some smart thinking – especially when the alternative to action is insolvency of the system in the 2030s and homeless grandparents.

Obama and Bush demonstrated that even with courage there is no way for a partisan politician to propose an entitlements solution that would be tenable to the opposition. You can be sure that Pelosi didn’t review Bush’s proposal thinking, “let’s see how we can make this work” any more than Ryan reviewed Obama’s with an open mind. The fact that they both later claimed to support the Simpson-Bowles reforms they vehemently opposed after its release is the punch line that reveals how two-party partisanship is anathema to responsive government.

Neither party has brought up this pressing issue in any meaningful way during presidential campaigns for years. Neither party has the stomach or the standing to be able to put forward a solution with any success. So neither party should try. Instead, a centrist coalition who can plant itself in the sensible middle ground needs to address it.

Imagine a centrist group that had the freedom to stand up and explain the dire and unsustainable reality of entitlements. And then imagine that group could propose, in a sensible way, reasonable measures to address the problem. Like these:

  • Since people are healthier than they were in 1932, they should contribute longer. After all, 67 is the new 65, right?

  • People who still make a whole lot of money don’t need the lower Medicare premiums as much. If you are still earning $240,000 or more a year, leave your $500 subsidy in the pool for the people who need it.

  • Index cost of living adjustments to the Chained-CPI. Let’s make sure Social Security payouts are growing only as fast as inflation.

Imagine these recommendations didn’t come from the party you hate (whichever one that is) and wasn’t going to lead to either party claiming that they defeated the other. It might just be possible that reasonable, low-pain steps could be taken to make sure Social Security works for the foreseeable future and my grandma doesn’t have to live in my extra room.

A few centrist Senators and Representatives could make this happen. This is the sort of thinking that the Centrist Project is all about.

 

Editor's note: This post was written by a Centrist Project volunteer blogger and the views expressed may not necessarily represent the organization