Tuesday, October 23 , 2018, 1:41 am | Fair 55º

 
 
 

Tom Donohue: Myths vs. Facts of Entitlement Programs

Social Security, Medicare and Medicaid together represent our nation’s compassionate commitment to the elderly, the sick and the less fortunate. They must be reformed and modernized to ensure that every family can count on them now and in the future.

But before our nation can have an honest debate on how to fix them, we must separate the myths from the facts.

Myth: Making any changes to these programs will undermine our commitment to care for the elderly and those in need.

Fact: Reform is the best way to ensure that these programs survive for the long term. As currently structured, they will not be able to withstand rising medical costs and the huge influx of retirees who are living longer than ever. Failure to address this problem will guarantee that we can’t uphold our responsibility to seniors and low-income Americans.

Myth: We must make deep cuts to the programs, resulting in drastically reduced benefits.

Fact: Leaders on this issue are not proposing actual spending cuts. But to sustain these programs, we must slow their explosive growth. It can be done through slight adjustments in payments, benefits, eligibility, administration, coverage options and program efficiencies with minimal effects on beneficiaries. And the sooner we act, the smaller the impacts will be.

Myth: We may have a problem, but there’s plenty of time to fix it.

Fact: All major entitlement programs are projected to be insolvent in 20 years. The trust fund for Social Security Disability Insurance will be exhausted in three years. The trust fund for Medicare Part A, which pays for hospital services, will go bankrupt in 13 years. Social Security will be unable to pay full benefits beginning in 2033.

Myth: These programs pay for themselves and don’t contribute to the deficit.

Fact: Entitlement programs have almost never been self-funding. Medicare has had a cash shortfall every year except in 1966 and 1974. Its annual shortfall in 2011 was $288 billion. Social Security had a cash flow deficit of $58 billion in 2012. Money must be borrowed to make up these shortfalls, contributing to the deficit. Entitlement spending also squeezes our investment in national priorities such as defense, education, infrastructure, science and research.

Myth: We can solve the problem by raising taxes.

Fact: It would take almost $40 trillion to make the programs solvent for the next 75 years. Hiking taxes by $40 trillion would cripple our economy and stifle the growth we need to support our nation’s social safety net.

Click here to learn more about the entitlement crisis and how the U.S. Chamber of Commerce is leading an honest debate on reform.

— Tom Donohue is president and CEO of the U.S. Chamber of Commerce. The opinions expressed are his own.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made using a credit card, Apple Pay or Google Pay, or click here for information on recurring credit-card payments and a mailing address for checks.

Thank you for your vital support.

Become a Noozhawk Supporter

First name
Last name
Email
Select your monthly membership
Or choose an annual membership
×

Payment Information

Membership Subscription

You are enrolling in . Thank you for joining the Hawks Club.

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover
One click only, please!

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.
You may cancel your membership at any time by sending an email to .(JavaScript must be enabled to view this email address).

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.