ENTITLEMENT REFORM
Entitlement reform is necessary now. Without reform, our entitlement program benefits will either be drastically reduced for the next generation or the programs will contribute to an ever-widening federal deficit that could significantly hurt our economy.
Entitlement programs provide a safety net to older and lower income Americans and are vital to our society. Older Americans have spent the majority of their lifetimes contributing to the American economy and have earned benefits such as Social Security and Medicare. These programs provide a minimum threshold of benefits to help this vital group as they age. Similarly, lower income Americans need benefits such as Welfare, Medicaid, Unemployment Insurance and Disability Insurance in order to provide for basic necessities in times of distress. The limited resources provided by entitlement programs must be directed to the people most in need of them. We can and should provide these benefits in a sustainable and fiscally responsible manner.
The entitlement system as currently designed has significant flaws that need to be resolved. Social Security’s trust fund will be insolvent within a generation and the costs of Medicare will continue to increase if changes are not instituted now. Fraudulent claims for Disability Insurance and Welfare programs must be detected and stopped, so that benefits are directed to those truly in need. Postponing these necessary updates to our entitlement system will only lead to much bigger problems down the road.
The cost of entitlement programs continues to grow and results in the United States taking on more debt to fund these programs. If the U.S. federal deficit grows in an unsustainable manner as a result of the spiraling cost of entitlement programs, interest rates will eventually rise and the economy will suffer as more resources are devoted towards propping up our entitlement system. We then run the risk that these entitlement programs will simply become unsustainable and the benefits delivered by these programs will be significantly reduced for all Americans.
We need to take the following measures to help preserve and enhance our entitlement programs:
Phase in a slight increase to the minimum retirement age to receive Social Security benefits.
Introduce means-based testing for determining whether retirees receive full or partial Social Security benefits.
- Provide enhancements to existing retirement savings programs (such as having automatic enrollment in 401k plans) and add new programs that incentivize individuals to save more for retirement.
State and local pension plans need to be rationalized going forward in order to provide full, promised benefits to current retirees while still providing a stable but reduced benefit to current / future workers and providing non-pension options like 401k plans to further support their retirement.
Better enforcement of eligibility requirements for Welfare and Disability Insurance in order to reduce fraud and lessen the number of able-bodied people falsely taking benefits.
Provide job training programs and job placement services for recipients of Welfare and Disability Insurance in order to encourage full-time employment.
Increase state control of Welfare programs through block grants of federal funding to allow states the ability to experiment and tailor their programs to the needs of their state in order to reduce poverty.
- A holistic reform of the healthcare system (including Medicare, Medicaid, The Affordable Care Act, and private health insurance) is also necessary and is discussed under Meridian’s Healthcare platform position.