Tuesday, October 24, 2006

What a Head in the Sand Looks Like

Is it stubbornness, or ignorance? It so often seems hard to tell with this White House. Yesterday Bush said that one of his highest priorities in his final two years in office is to address the looming Social Security and Medicare funding problems. Good. I'm glad. I agree that those are the most important fiscal issues that our generation will face, and rightly deserve high priority in the next year.

However, I was dismayed to then read that his prescription for doing so was to index Social Security benefits to inflation rather than wages. From Reuters:
President George W. Bush on Monday put Social Security reform on his list of "big items" to deal with in the final two years of his presidency, possibly including indexing benefits for wealthier Americans. Interviewed on CNBC television, Bush said: "I want to deal with the unfunded liabilities inherent in Social Security and Medicare."

...Bush said "my idea" is that Americans at lower income levels would see benefit payments continue on the current basis, but "if you're a wealthier citizen, your benefits increase at the cost of living...so everybody's benefits go up but some go up faster than others."
Haven't we already been through all of this? Reducing benefits (which is what such indexing would do) is a perfectly reasonable possibility to address the Social Security shortfall (though not one that I happen to agree with)... but it is a fix to the SS problem that was clearly and soundly rejected by the country when Bush did everything he could to sell it - for 6 full months - in 2005.

And much more importantly, I was surprised that he made no mention of any effort to address the fiscal problem that makes the Social Security gap look tiny by comparison: the impending fiscal crisis that will be brought on by federal health spending in coming decades.

Just as a refresher, here's the picture from the most recent Social Security and Medicare Board of Trustees Report:

The small pink bits at the bottom of each bar represent the SS funding gap. The rest of the bar is the funding gap that the government faces to pay for health benefits that have currently been promised to Americans.

If you really want to tackle the real problem, then you must - must - address the health care funding crisis. I hope to be pleasantly surprised, and find that Bush takes his head out of the sand about that problem at some point during the remainder of his presidency. But I'm not holding my breath.

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