The following editorial appeared in Sunday's Washington Post:
If the next president is lucky enough to have two terms, he'll leave office just as the baby boomers are beginning to retire. The toughest fiscal problem he will face, assuming he doesn't duck it, will be how to provide for the long-term cost of that retirement -- how to make Social Security and Medicare financially secure.
George W. Bush has made proposals for the restructuring of both programs. The proposals have won him some praise for being willing to venture onto difficult terrain. Our contrary sense is that he has finessed the difficulties. His plans are thin and, far from reflecting political courage, play to party orthodoxy in favoring private investment and private insurance over government programs.
Al Gore was much mocked earlier in the campaign for deploring so many Bush proposals as "risky schemes," and he has pretty well abandoned the term. In fact, in our view, it's an accurate description of what Mr. Bush has revealed of his plans for Social Security and Medicare. But that raises a question. If neither of these programs has enough money in sight to cover predictable costs, and if Mr. Bush's answer to the problem is the wrong one, what does Mr. Gore think is right? How would he, who poses as the more fiscally responsible of the candidates, make these programs whole?
Sadly, his answer too is lame. He looks mainly to the projected budget surplus, but even in the most optimistic of current projections, the surplus is temporary -- and it is precisely the rising cost of the giant programs for the elderly that wipes it out. To solve the problem, he would use a surplus that the problem itself consumes.
His proposal for Social Security parallels Bill Clinton's. He would rightly use the bulk of the current surplus to pay down debt and ultimately credit the interest savings to the Social Security trust fund. That's a fancy way of saying that over time more general revenues would be used to cover Social Security costs without saying exactly from where those revenues would come. The debt reduction is good policy -- it should help the economy grow -- but otherwise this is not so much a solution to the problem as it is a complicated deferral. Mr. Gore would also use some of the surplus to help lower-income people especially build up private retirement savings. If the plan worked, it would provide a cushion against eventual cuts in Social Security. But he no more than Mr. Bush confronts the fact that in the long run there will have to be such cuts, and/or tax increases, to keep the program running. Instead, both of them use a lot of intermediate gingerbread to mask that fact; they defer the day of reckoning.
They have even less to say about Medicare's long-term prospects, which if anything are even bleaker. Indeed, they would add to the problem by expanding the program to include a drug benefit, which is both needed and costly. Mr. Bush proposes greater competition among private insurers and providers as a means of containing costs. But competition at best will provide the program with a shave; it is not a solution. Mr. Gore has his own proposals for reforming the program internally -- some are quite elegant -- and once again he would look to the surplus to extend its solvency. But this overburdened surplus is a projection only; much of it is also an accounting illusion; and even if some of it materializes, the estimators warn it won't last. What does Mr. Gore suggest the government do then?
Mr. Gore is right to resist the Bush tax-cut proposals and to insist instead that most of the money be kept within the public sector, where it is needed to sustain existing programs -- mainly the social insurance programs, but not only those. He is right as well when he argues that the Bush proposals for restructuring Social Security and Medicare entail unnecessary risk.
Brainerd Dispatch ©2013. All Rights Reserved.