Local view: Beware Republican ‘reforms’

Talk about it

Republicans and Democrats have renewed their positions in budget negotiations.

Some Republicans propose solving our financial problems by protecting the rich and by forcing middle- and lower-income Americans to accept the destruction of our social safety net.

Apparent targets include Medicare and Social Security. Although the Social Security program will be solvent until 2030 and Medicare for several more years, some Republicans claim we are in a crisis situation now.

Let’s get something clear. These two programs are social insurance programs with beneficiary participation in the funding. To label them as free “entitlements” is a propaganda technique that seems to be succeeding.

Any proposal to “voucherize” either program could lead to disastrous situations for middle- and lower-income families. As shown in this Bush-

related recession, the stock market can wipe out one’s resources quickly. Who will provide financial support for the “losing” elderly?

Our present retirement system has worked well in ending the grueling poverty of previous generations, has protected grown children from having to support their elderly parents and has greatly improved the quality of life of recipients.

“Voucherizing” Medicare may not much benefit some recipients. Who will determine the amount to be given to beneficiaries each year? Congress? Oh my! What if recipients are given $6,000 per year (as has been proposed) to purchase insurance but the actual cost is $7,500? If the recipient can’t afford an additional $1,500, he or she must purchase lower benefits. Then who will cover the service costs up to the triggering benefit level? Who will cover the service costs not covered in the reduced benefits? What will be the impact on doctors and hospitals to cover their losses for people who could not pay?

The primary suggestion for reducing costs related to the Social Security retirement program has been to increase the retirement age. It already has been increased from 65 to 67. Although it is argued the average age of death has increased to 76 for men and 82 for women, this does not take into account the failing health of many people when they become older. Are we going to punish people in poor health by making them work longer?

For 2012, the Social Security tax applies up to $110,100 of one’s annual salary. If that or less, the tax is based on 100 percent of salary. If one’s salary is $250,000 per year, the tax is based on about 40 percent. And if one is a millionaire, the tax is on 10 percent or less of salary. Who benefits from this differential? The tax cap should be removed so all people pay the same percentage of their salaries.

Also, Social Security retirement benefits should be means-tested. If beneficiaries have an income over a certain amount, perhaps $250,000, then the benefit would be frozen. If their income dropped below $250,000 per year, then the eligibility would be re-established. These policy changes could eliminate the need for an age change and could make the program solvent far into the future.

Although many in Congress seem to approach problems only through cost-saving eyes, they must also look at the possible negative consequences of their arguments. After all, they are elected to represent all Americans, not just the fortunate few.

Donald E. Maypole, PhD, of Lake Nebagamon, was the first director of the Department of Social Work at the University of Minnesota Duluth. He has taught extensively in the U.S. and Europe.

Tags: local view, opinion, editorials, politics, money