Over the past six weeks I have had the honor of testifying before Congress four times on various aspects of Social Security and Medicare. This testimony has generated a new stockpile of reference information for those who are interested. Links to this information are provided below.
On June 3, I and my fellow Public Trustee Robert Reischauer testified before the House Ways and Means Subcommittee on Social Security, on the Social Security Trustees' Report.
My testimony can be found here. I described the factors driving Social Security's cost growth and financial shortfall as well as the importance of enacting legislative corrections soon. Video of the testimony can be found here.
On June 22, again with Dr. Reischauer, I testified before the House Ways and Means Health Subcommittee, on the Medicare Trustees' Report. My testimony can be found here. Full video can be found here. One particular exchange, in which Rep. Roskam questioned us about the implications of Medicare HI's projected Trust Fund depletion date of 2024, received a fair amount of circulation afterwards.
On July 8, I testified again before the House Ways and Means Subcommittee on Social Security, this time on possible reforms to Social Security's benefit structure. This appearance was somewhat different from the other three because I was offering subjective invididual views on benefit reforms, and not representing the findings of the Trustees. My testimony can be found here. I offered nine suggested rules of thumb for altering current benefit schedules:
- Act soon.
- Yes, slow the growth of benefits.
- Recognize demographic realities.
- Phase in changes as rapidly as palatable before 2035.
- Repair flawed work incentives.
- Protect the vulnerable by constraining benefit growth for higher-income workers.
- Maintain the contribution-benefit link; don’t means-test.
- Maintain the link between retirement/disability benefits.
- Avoid unnecessary complexity.
On July 12, I testified before the House Oversight and Government Reform Subcommittee on Health on the Trustees' 2011 issuance of a Medicare funding warning. My testimony explained the details of the funding warning (required by law) and can be found here.
Today E21 published an article I recently wrote supporting the adoption of chained CPI (C-CPI-U) to index various aspects of federal law. It can be found here.
The main points made in the article are:
- C-CPI-U is the most accurate available measure of economy-wide inflation.
- The purpose of CPI-indexation is to capture inflation, not to attain targeted benefit or tax levels.
- Though deficit reduction is by itself not a sufficient motivation for choosing a CPI measure, the federal balance sheet would improve with C-CPI-U, especially over the long term.
- Proposals to adopt an alternative measure of inflation (CPI-E) would produce absurd results.
- Though distributional factors should not guide the decision, C-CPI-U does offer some distributional advantages.
CPI reform is not Social Security reform, and for both tactical and substantive reasons should never have been presented as such. By itself, it won’t fix the long-term budget outlook, which task requires serious further reforms of Social Security and the health care entitlements. It would, however, improve the long-term outlook for the federal budget as well as for Social Security. Not every distributional consequence of CPI reform will be to everyone’s liking, but that is true of any technical refinement of the federal government’s indexing methods. Altogether, CPI reform is a long overdue correction that would serve the interests of negotiators on both sides of the aisle, of taxpayers – and of the nation as a whole.
(photo credit: Rik Panganiban)