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The Road From Here: What About Medicare and Social Security?

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This divisive anti-entitlement talk overlooks some crucial facts. Social Security was not projected to run a deficit until two things happened: First, an enormous amount of our national income moved to the top 1 percent, above the current payroll tax; and second, the Wall Street-driven financial crisis left 22 million Americans un- or under-employed, depriving the program of even more revenue.

Medicare's projected costs, which were projected to eat up the lion's share of the federal budget over the next 75 years, have come down or as a result of reductions in the rate of health care cost increases. Its remaining cost problems are well beyond the control of the individual seniors who belong to the program, so benefit cuts would merely victimize them by placing a much greater burden on them as individuals.

Those projected costs are, above all else, the result of runaway profit-taking in our medical economy -- a problem which Washington's insiders appear unwilling to address.

The fix is ... out

But, aside from the Progressive Congressional Caucus and a few courageous Senators, few people in Washington are talking about the fairest and most effective fixes for these problems. For Social Security that means raising the payroll tax, imposing a Wall Street transaction tax, and increasing payroll contributions -- which a poll  shows most Americans would be happy to pay in return for increasing, rather than decreasing, its benefits.

For Medicare, it means reorganizing our payment system so that it more closely resembles that of the nations which refuse to tolerate excessive profit-taking in health care -- and pay far less than we do for it.

Unfortunately, most of the Senators and House members promoting these solutions are not in leadership positions. So we find ourselves in a Bizarro-World situation where too many Democrats speak like Republicans, most Republican Party leaders speak like right-wing extremists, and the Republican Party "insurgents" sound more and more like the leaders of paramilitary militias.that's not a strong foundation on which to negotiate our economic future.

The posturing

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Now the posturing has begun. The position taken by Durbin, and apparently by the President as well, is that Republicans must agree to tax increases in return for entitlement cuts. As Zach Carter reported in the Huffington Post, Chris Wallace of Fox News asked Sen. Durbin why Republicans should have to agree to anything in order to get cuts which Democrats like Durbin and the President already support.

Unfortunately, it's a reasonable question. Not only do these Democrats apparently want to cut "entitlements" -- some such cuts are included in the president's current budget -- but they've essentially conceded as much, leaving them very little negotiating leverage.

for their part, Republicans say they're willing to give up the harmful cuts known as sequestration -- and only those cuts -- in return for Social Security and Medicare benefit reductions. Their defense-contractor patrons would be amply rewarded in return for sacrifices from America's seniors and disabled.

The scenarios

That's where our short list of scenarios comes in. So far, defenders of Social Security and Medicare have been saved by the extremism of the Republican Party's right. They'd be more than happy to cut Medicare and Social Security -- perhaps to eliminate them altogether -- but they don't seem inclined to accept any accommodation with the "interloper" they believe is living in the White House.

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So, in one scenario, Social Security and Medicare are saved from the so-called "Grand Bargain" by Tea Party extremists who refuse any deal. That rescue would come with a very high price: ongoing economic uncertainty would continue to drain the nation of jobs and growth, while GOP extremists continued to polarize society and degrade our political rhetoric.

In a second scenario, Democrats retreat considerably from their current position and accept these entitlement cuts in return for something like a one-year cease-fire in the government shutdown and debt ceiling wars.

In another scenario, the "Grand Bargain" is negotiated by leaders from both parties, and is then celebrated as a triumph for common sense and a victory for "the adults in the room." That would lead to even greater financial hardship for tens of millions of seniors and disabled Americans, now and for many decades to come.

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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I still want to know what Social Security has to d... by Hosea McAdoo on Monday, Oct 21, 2013 at 2:46:46 PM
I think this entire 'crisis' is just a ploy, an ex... by 911TRUTH on Tuesday, Oct 22, 2013 at 12:28:48 AM
You got the main point.The deficit is produced by ... by BFalcon on Tuesday, Oct 22, 2013 at 3:30:25 AM
First, remove the cap on the income subject to Soc... by 911TRUTH on Tuesday, Oct 22, 2013 at 11:23:58 AM
Yes Sir, it by BFalcon on Tuesday, Oct 22, 2013 at 11:52:09 PM
The mistake was made way back in 34 ?  These ... by Harry Sommerer on Monday, Oct 21, 2013 at 8:17:52 PM
When I started working many years ago, I tried to ... by Anton Grambihler on Tuesday, Oct 22, 2013 at 1:29:42 AM
Reform Soc Sec by John Jonik... by John Jonik on Monday, Oct 21, 2013 at 10:36:15 PM
Reform Social Security by John Jonik... by John Jonik on Tuesday, Oct 22, 2013 at 1:42:46 PM