Entitled Selfishness
Boomer Generation Is in a State of Denial
By Robert J. Samuelson
Wednesday, January 10, 2007; A13, Washington Post
As someone born in late 1945, I say this to the 76 million or so subsequent baby boomers and particularly to Bill Clinton and George W. Bush, our generation's leading politicians: Shame on us. We are trying to rob our children and grandchildren, putting the country's future at risk in the process. On one of the great issues of our time, the social and economic costs of our retirement, we have adopted a policy of selfish silence.
As Congress reconvenes, pledges of "fiscal responsibility" abound. Let me boldly predict: On retirement spending, this Congress will do nothing, just as previous Congresses have done nothing. Nancy Pelosi promises to "build a better future for all of America's children." If she were serious, she would back cuts in Social Security and Medicare. President Bush calls "entitlement spending" the central budget problem. If he were serious, he, too, would propose cuts in Social Security and Medicare.
They are not serious, because few Americans -- particularly prospective baby-boom retirees -- want them to be. There is a consensus against candor, because there is no constituency for candor. It's no secret that the 65-and-over population will double by 2030 (to almost 72 million, or 20 percent of the total population), but hardly anyone wants to face the implications:
? By comparison, other budget issues, including the notorious earmarks, are trivial. In 2005, Social Security, Medicare and Medicaid (the main programs for the elderly) cost $1.034 trillion, twice the amount of defense spending and more than two-fifths of the total federal budget. These programs are projected to equal about three-quarters of the budget by 2030, if it remains constant as a share of national income.
? Preserving present retirement benefits automatically imposes huge costs on the young -- costs that are economically unsound and socially unjust. The tax increases required by 2030 could hit 50 percent, if other spending is maintained as a share of national income. Or much of the rest of government (from defense to national parks) would have to be shut down or crippled. Or budget deficits would balloon to quadruple today's level.
? Social Security and Medicare benefits must be cut to keep down overall costs. Yes, some taxes will be raised and some other spending cut. But much of the adjustment should come from increasing eligibility ages (ultimately to 70) and curbing payments to wealthier retirees. Americans live longer and are healthier. They can work longer and save more for retirement....
... Opportunities for gradual change have been squandered. These public failings are also mirrored privately. I know many bright, politically engaged boomers who can summon vast concern or outrage about global warming, corporate corruption, foreign policy, budget deficits and much more -- but somehow, their own Social Security and Medicare benefits rarely come up for discussion or criticism. Older boomers (say, those born by 1955) are the most cynical, hoping their benefits will be grandfathered in when inevitable cuts occur in the future.
Our children will not be so blind to this hypocrisy. We have managed to take successful programs -- Social Security and Medicare -- and turn them into huge problems by our self-centered inattention. Baby boomers seem eager to "reinvent retirement" in all ways except those that might threaten their pocketbooks.
1 comment:
After my original post, I read the following commentary on Robert Reich's blog (http://robertreich.blogspot.com/2007/01/bad-medicine.html)
OK, as I mentioned, I am willing to sacrifice for future generations, but not to let big pharma continue their pricing approach. Something realistic has to be done, probably by the government, to constain health care cost, in this case, perscription drugs.
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"House Democrats are pushing a bill to require Medicare to negotiate drug prices. So far, so good. But in what appears to be a bow to the political clout of Big Pharma, the bill does not authorize Medicare to drop from its approved list drugs on which manufacturers fail to offer good deals. This is like Wal-Mart telling its suppliers "we’re going to use our bargaining clout to get from you the lowest prices for our customers – but regardless of what price you offer we’ll still carry your product in our stores." What kind of incentive is that?
The Department of Veterans Affairs gets a 25 percent discount on drug prices for veterans because if a drug company won’t give a big discount, Veterans Affairs won’t include the drug in its plan. Medicare recipients will only get these kinds of savings if Medicare can do the same – walk away from a drug manufacturer that won’t deal.
The way to do this without denying seniors drugs of their choosing would be for Medicare to set up its own drug plan to compete with those of private insurers. Medicare would subsidize any plan, so seniors wanting drugs not on the approved list would still have access to them. But seniors wanting the lowest drug prices would join Medicare’s own plan. It would have the cheapest drugs because the plan’s size would give it the most bargaining power and because it would only include drugs that manufacturers offered at a deep discount.
The current Democratic bill is calculated to make everyone happy. It allows Democrats to tell seniors and the all-important AARP that they’re forcing Medicare to negotiate with drug companies. And it also allows Democrats to turn around and tell Big Pharma not to worry because the negotiations won’t have any real teeth in them. Their drugs will still be approved, regardless of price.
But the bill won’t make anyone happy. It won’t deliver seniors real drug discounts. And Big Pharma will still fight it. Drug manufacturers see any move toward negotiations, even one as innocuous as this, as a slippery slope toward government price controls. And they’re intent on using their considerable clout on Capitol Hill to stop any such bill. Even if the bill makes it to the Senate, new Senate Finance Chair Max Baucus is unenthusiastic about Medicare negotiating drug prices, and has twice opposed similar measures. In the unlikely event the bill makes it to the President’s desk, he’ll almost certainly veto it. And the Democrats don’t have the votes to override the veto.
House Democrats should come up with a bill with real teeth in it – one that forces drug companies to offer real discounts. Even if it didn’t pass this time, a vote on it would at least show whose side its opponents were on. And it would give fodder for Democrats to run on in 2008 – including a Democratic presidential candidate. "
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