30 Issues: Sense of Entitlement - Social Security and Medicare

Tuesday, October 07, 2008

The third rail may be issue number one this election. How will the economy affect Social Security, Medicare and other entitlement programs? How much fixing do they need? Peter Diamond, economics professor at MIT and co-author of Saving Social Security: A Balanced Approach, looks at the state of Social Security and the changes the program has seen over the past eight years. Then, Mike Tanner, Senior Fellow at the Cato Institute and Mark Weisbrot, co-Director of the Center for Economic and Policy Research take a look at McCain and Obama’s plans for Social Security and Medicare. Then, a call for those of you near retirement or thinking about retirement who may be changing your plans in the current economic climate. Are you delaying retirement? Working part-time? Comment below!


Peter Diamond, Mike Tanner and Mark Weisbrot

Comments [34]

michael fleischer from northern NJ

Where is the fed gov going to get the money to pay these obligations. The Fed gov owes 10 trillion dollars in debt and if you estimate the total obligations in Soc sec and other programs the total is like 40 trillion. If the gov borrows and prints more money then the benefits that it is paying out will be worth much less because the value of the dollar will be so much lower. The older people alive today have failed to save enough and are victims of a big government overspending that has resulted in inflation & devaluation of the dollar. Get the governmnet OUT Of the business of centrally managing the economy, eliminate the federal reserve, reduce taxes, this will stimulate SAVINGS and long term investment in things with real value and THAT is what we need for people to build wealth. Its shocking to me to hear people like Mr. Weisbrot reveal a complete ignorance of the inflationary effects of the federal reserve system and the fact that the crises in soc security and medicare exists precisely b/c government is involved in an area in which it has no constitutional authority. He is advocating a continutation of a welfare-nanny state in which the older population can exert political special interest pressure on politicians to confiscate the earnings of younger people and give it to the elderly. Its class and generational warfare and its the governments fault.


Oct. 07 2008 12:24 PM
Jeannette Brown from Hillsborough, New Jersey

I am 74 and I have been on Social Security for about 10 years as I had to take early retirement. What surprised me is that I have to pay taxes on my benefits, that when they give us a cost of living increase it is offset by the increase in Medicare payment for the most part. The cost of living increase is therefor not that much. If they reduce it and Medicare keeps up the increases then I might have a negative cost of living increase.
I also receive a defined benefit pension from my former employer but that was only for 25 years of work. That pension has only given us a cost of living increase once in 10 years, I hear that we might get another small increase this year. I worked for another employer for 11 years and even though I was vested in their pension plan I could not take it with me and they paid me off. It was before the law that said you could take pension with you.
Medicare is great as far as I am concerned. I have cancer and between Medicare and my retiree health insurance benefit I have paid very little even though I had chemo which is very expensive.
So basically I don't have to live on my investment except for the fact I have to take the minimum distribution.
I work as a consultant and I have been able to get grants to do my work as an African American Women Chemists historian.

Oct. 07 2008 12:20 PM
Inquiring Minds

@30 hjs

You might like:
Bill Moyers Interviews Andrew J. Bacevich
"s an imperial presidency destroying what America stands for? Bill Moyers sits down with history and international relations expert and former US Army Colonel Andrew J. Bacevich who identifies three major problems facing our democracy: the crises of economy, government and militarism, and calls for a redefinition of the American way of life"

"And so, Bacevich concludes, we cannot solve our problems by simply electing a new president, or removing a belligerant foreign regime. To address our triplet crises, we must first confront our core misconceptions. Which we do, Bacevich explains, by confronting our consumerism and up our Messianic dreams and ceasing our efforts to coerce history in a particular direction. This does not imply a policy of isolationism. It does imply attending less to the world outside of our borders and more to the circumstances within. It means ratcheting down our expectations. Americans need what Niebuhr described as "a sense of modesty about the virtue, wisdom and power available to us for the resolution of [history's] perplexities.""

Oct. 07 2008 12:08 PM
Inquiring Minds

@27 hjs

I think you might be surprised. "TLE" and other literature is eye opening. I am trying to be a force for good, advocating a smoother transition to "more entropy", a lower energy existence.

We simply cannot continue to promise "business as usual". The level of denial about this is incredible. We all need to do more individually and HAVE LESS.

This puts me at odds with NEARLY EVERYONE.


Oct. 07 2008 12:02 PM
hjs from 11211

thanks BL for speaking up for homemakers and caregivers of children. they too should get SS

Oct. 07 2008 12:00 PM
Fred from Manhattan

It would be appreciated if you did a segment on the satisfaction doctors have with Medicare. Since the beginning of the year, many doctors have had recurrent and systemic problems in getting paid.

Oct. 07 2008 11:59 AM
Eli Curi from Manhattan

Today's debate was so much better than yesterday's debate. I like the fact that you present both the McCain position and the Obama position, but I don't like it when your guests have a bone to pick. And yesterday's Obama supporter (Talbot) clearly had a bone to pick. I'm an Obama supporter, but Talbot was very annoying. If I wanted a bunch of finger pointing and angry opinions, I would watch cable news. But I prefer NPR because you usually have guests who are smart, civilized and who can disagree in a productive way. In the future, please try to have guests like today instead of yesterday.

Oct. 07 2008 11:59 AM
hjs from 11211

26 IE
and that might be the only thing we agree on :)

Oct. 07 2008 11:57 AM
Inquiring Minds

@24 hjs

Love Kunstler. We are in the early stages of "TLE".

Oct. 07 2008 11:55 AM
Art from Brooklyn


Journalists should be concerned with uncovering the truth. When two 'experts' disagree about basic facts one, or both, are not being truthful. Rather than indulge in the game of partisan truth telling why not actually devote time to rigorously fact checking your supposed 'experts' after their appearance and reporting on your findings. If you do such a thing conscientiously you will soon realise that propagandists from the Cato Institute and the like are not being honest and are unworthy of air-time.

Oct. 07 2008 11:55 AM
Nicholas J. from Georgia

Social Security has been and still is the single most effective and efficient government program created. It has certainly outperformed private sector pension plans which have been going belly up right and left for the last eight years.

The Clinton Administration was able to create the government environment in which he was able to create a projected surplus of 2.1 trillion dollars over the ten years following his presidency. That surplus was created basically by "lockin" the trust fund. That is to say, Clinton stopped using part of money coming in from payroll taxes to fund current govenrment expenses by raising income taxes on the wealthiest Americans from the 28 percent it was under Reagan to 39 percent. Conservatives all cried that this would bring on a depression when in fact, the Clinton Administration was one of strongest financial periods of the post WWII Era.

Social Security is solvent, and would be solvent, and even could see increases in Social Security payments if one thing was done. Simply stop using payroll taxes to fund the daily operation of govenrment. That would be tough on the wealthy, because Payroll taxes make up 40 percent of government revenues, and the Reagan and Bush Tax cuts were largely financed by robbing the national pension plan and giving those funds to the wealthiest Americans in the form of a tax cut.

Oct. 07 2008 11:53 AM
Susan from Kingston, New York

Mike Tanner is clearly clueless!

Oct. 07 2008 11:49 AM
Inquiring Minds

@21 Shelli

Read comment #6. Get more facts. Read Naomi Klein's book, "Shock Doctrine", about fear.

Oct. 07 2008 11:48 AM
Shelli from West Orange, New Jersey

Can we please hear again and again that, had the Republicans succeeded in privatizing Social Security, how many peoples retirement funds would have been decimated. Can we please hear, again and again, what an insecure choice that would have been, especially with the propensity of these businesses to become extremely corrupted in direct relation to Government oversight being rescinded, which is a basic Republican philosophy.

Oct. 07 2008 11:44 AM
Christina from New York, NY

I am in my early thirties and have had jobs and am now in graduate school. I was encouraged to invest in a ROTH-IRA with the strong impression from my parents that Social Security would not be there for me. (I've put in as much as a grad student can, and it's lost significantly in the past week.) When I exit school and start working and depositing into a regular IRA account, should I even bother with the ROTH-IRA? How many savings options for the future does one need?

By the way, I applaud Obama's plan to not tax retirees' income below $50,000. My retired parents pay exorbitant tax every time they go over $40,000 per year from their retirement fund for living. I think it should be increased even higher.

Oct. 07 2008 11:39 AM
CED from Tampa, FL

Who is this "Obama-y" joker, saying it's really just no big deal? He is not talking about Obama's stand, or Obama's ideas.

Let's get someone who will actually defend or promote the policies Obama would potentially implement.

Oct. 07 2008 11:37 AM
KC from NYC

The idea that privatization is even being considered, by a major-party candidate for President of the United States, is amazing. That the American people think this is OK is a harbinger of bad, bad things in our immediate future.

Oct. 07 2008 11:35 AM
hjs from 11211

that tax rebate check was your Social Security benefit, hope u invested it somewhere safe

Oct. 07 2008 11:33 AM
O from Forest Hills

Obama will be President.

Do not privatize social security under any circumstances. That is not the answer. More taxes on the wealthy.

Social security pays 1/3 to care for disabled people besides widows and orphans. Are we going to put them to work to earn investments?

That is ridiculous!

Oct. 07 2008 11:32 AM
jeff from nyc

Mike Tanner is a jerk. These MFer's have been trying to destroy SS, since FDR. I cannot believe this guy has the nerve to come on the air and suggest privatizing SS when the market is crashing.

Oct. 07 2008 11:32 AM
DIck from Brooklyn

How is it "Means tested" today?
RadRepub seems to misunderstand that it is an insurance scheme and not in any pejorative sense.
His Dad is lucky he doesn't need the benefits.

Oct. 07 2008 11:29 AM
KC from NYC


Why does it matter what it says on the check? Remember when you got your $300 tax rebate after Bush came to office? It specified, essentially, that this money was coming from George W. Bush. It was an outrageous bit of partisan phrasing. These people have been playing this game for eight years. Why can't this be acknowledged by the mainstream media? What do they have to do before you start seeing this pattern?

Oct. 07 2008 11:28 AM
Inquiring Minds


Legally, Social Security benefits are not a LIABILITY of the Federal Government. Were they, the government would be insolvent.

David Walker, the ex-Controller now-with-pete-peterson, speaks about this often.

Oct. 07 2008 11:28 AM
Henry from Katonah

Thanks, Brian. I usually learn a lot from your show but your last guest (MIT's Peter Diamond)CLARIFIED this subject that everyone is so ignorant about. Can you get him to fact-check the smoke that your next guests are likely to blow?

Oct. 07 2008 11:28 AM
Amy from Manhattan

I thought Obama was talking about eliminating the income ceiling above which no additional SSI tax is taken out regardless of income, not increasing the actual percentage of income taken out.

Oct. 07 2008 11:27 AM
Chuck from Brooklyn

McCain has no real answers.

I don't think he cares.

He sounds empty.

He's already collecting anyway.

Oct. 07 2008 11:23 AM
Inquiring Minds

The dirty secret is: Some -- you know who they are -- want to corrupt INSURANCE and turn it into an INCOME TRANSFER mechanism, "robbing Peter to pay Paul"

The only fair way to have insurance is to charge the expected claims plus a management fee -- determined by an actuary, not an elected official.

Nationalized health care, like social security, is just a scheme to take $$$$ from one group and give it to another.

Oct. 07 2008 11:16 AM
RadRepub from Upper Left Side


My father is 67 and has been paying into the Social Security system for 50 years. When he attempted to get his benefits, the Social Security Administration told him he makes too much money per year to receive his benefits. Where's the fairness in that?

Oct. 07 2008 11:13 AM
Inquiring Minds


"life cycle investing" in the stock market dominates all other ideas, even accounting for risk. [so, a young person might have 90% equity and be down a lot right now; an old person would be 90% cash and down very little; the young person has a lifetime to make up todays losses]

FURTHER, those of you in love of these socialized systems, like social security, fail to account for the fact that the government LIES about the inflation rate [check out] so they are STEALING your money by deflating the value of your eventual receipts...

stocks are more of an inflation HEDGE

Oct. 07 2008 11:12 AM
Carol from NJ

Are you sure the projection forward is average earnings not current earnings? Assuming that earnings increase over time this makes a big difference

Oct. 07 2008 11:11 AM
hjs from 11211

social security is dead only if 'we the people' let the government take it way from us.
the bush regime wanted to end SS as we knew it and this is their way of getting it.
tax the trust funders, get them to pay for this mess.

Oct. 07 2008 11:08 AM
Inquiring Minds


You have a right to be concerned.

I wish Brian Lehrer would do a show, something like "Is Insurance Fair?"

They should have an online calculator. They should discuss the "young invincibles".

Point is: You could take a newborn baby, a healthy one, sign him up for:
1) health savings account + catastrophic health care plan with high deductible
2) a forced saving plan

This individual, by the time they were a young adult WOULD NOT NEED INSURANCE. And, incentives would be aligned, that is, the individual would relate their actions to consequences.

But, people who want to SOCIALIZE ALL RISK, hate these ideas, that is why these types of plans are fought.

Truth is: They want others to indemnd

Oct. 07 2008 11:04 AM
Graham from Paris

How about the Republican conservatives' former urgings that the only way to secure our Social Security system is to privatize it and allow everyone to invest for their retirement in such safe growth placements as the stock market?

Would this be a good time to put all the retirement funds in the stock market as the conservative economic geniuses (such as R. Reagan and John McCain) have called for?

Oct. 07 2008 11:01 AM
Robert McFeeley from Staten island

As a person who has a total private account and does not pay Social Security. (i pay into a 457 PLAN) What do the candidates plan for me?

Pres Clinton tried to "privatize Social Security" only his plan was the government was to invest in the stock market instead of T-Bills with the hope of higher returns. But he also tried to eliminate options like a 457 Plan. ( I also have a theory that is why Bush won OHIO in 2004 because of this.)

Pres Bush tried to give individuals a portion of their money in an account which could be invested. Which is a mini version of what I have.

Oct. 07 2008 10:15 AM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.