(Jim Clark) – Headlines and pundits have pronounced the election victory of Senator Scott Brown (R – MA) the death of Obamacare and its stunning deficits. After that election loss President Obama invited GOP solons to a White House bipartisan summit to be held Feb 23 to craft a health care bill conservatives could support.
But at the same time Democratic leaders are furiously working in secret to bypass Congressional rules and get their old and discredited pork barrel health care legislation onto Obama’s desk for signature. As columnist Jonah Goldberg describes it: “Obama is going to say ‘nice doggie’ to Republicans right up to the moment he smashes them with a rolled-up 2000 page health care bill.”
As David Limbaugh writes in an article titled Bipartisanship equals Single-Payer-ship: “Republicans first called for bipartisan talks last May and offered alterative plans which Obama summarily rejected.” So what’s the point?
Just as this entire duplicitous head fake hit the headlines the chief actuary for the Social Security Administration announced that the fund is running in the red. A wave of recession related retirements coupled with diminished payroll taxes as a result of an unemployment/underemployment rate pushing 20% has depleted the fund’s reserves.
Last year payroll tax revenue flattened due to unemployment and diminished bonuses; the number of retired workers who began taking benefits rose by 20%; disability claims jumped 10%; and monthly benefits actually rose 5.8% because of an energy spike cost of living increase.
What to do?
Does anyone think that the Democratic Congressional majority who, as a Democratic Congressional minority blocked Social Security reform in 2005 can be pried away from their quest for socialized medicine to deal with this very real problem? We can forget that one. The fix may have to wait until after the 2010 elections when the GOP picks up Congressional seats, possibly even a majority in both houses.
If and when that happens Reno investment advisor and economist Bob Barrone has some advice on what it’s going to take to fix Social Security as well as Medicare. Benefits will have to be reduced and the retirement age increased, according to Barrone, and future increases will have to be less than the rate of inflation. This will exacerbate our unemployment problem since workers will not be leaving as soon and when they do they will be spending less. Additionally payroll taxes will have to be increased Barrone says.
The 2009 the Social Security and Medicare trustees’ report states that in order to pay benefits currently promised payroll taxes will have to be increased to 37% of payroll from the current 13%. If Medicare costs continue to grow at 2.5% per year (the historic average since 1970) by 2050 Social Security and Medicare will consume the entire US tax inflow (the Obamacare bills do not address tort reform or abuse, the two main drivers of medical cost increases).
The report states that if Congress wants to continue its current level of activity and still hope to achieve a balanced budget the lowest income tax rate will have to be increased from 10% to 26 % and the highest from 35% to 92%. The cure is painful but the disease is fatal so we don’t have a lot of choice.
Thomas Jefferson said: “To preserve our independence we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude.”
Remember that when you vote next November.
(Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee)