“Let’s talk about Medicare and entitlements. Both Medicare and Social Security are going broke and taking a larger share of the budget in the process. Will benefits for Americans under these programs have to change for the programs to survive?” — Martha Raddatz, vice presidential debate, Oct. 11, 2012
It’s a given that political candidates will misrepresent facts and spin them to their own advantage. That’s what we’ve come to expect when candidates meet face-to-face for a debate. Watching a supercharged event like last night’s vice presidential debate, we viewers often have to work hard to separate the debaters’ wheat from their chaff.
Martha Raddatz of ABC News is receiving well-deserved praise for maintaining decorum and holding the debaters to some level of forthrightness. But the wording of her own question about “Medicare and entitlements” feeds widespread misunderstanding about two government programs that are most important to Americans.
Let’s start with the last part: that Medicare and Social Security are “taking a larger share of the budget.” In regard to Medicare, that’s absolutely true. It not only makes up an increasingly large portion of the federal budget, but — though supplemented by payroll taxes, beneficiary premiums and a variety of smaller sources — it also consumes an increasingly larger piece of the general revenue pie.
The same can’t be said about Social Security. Raddatz would have been on more solid ground had she said that Social Security is a larger share of the general budget. But it doesn’t “take” money from the general budget or draw from general revenue. It’s financed strictly by payroll taxes on workers and employees — oh, and by interest on the money that Uncle Sam borrowed from Social Security to cover its general budget.
Which takes us back to the first part of Raddatz’s comment — that Medicare and Social Security are going broke. They’re not.
Both programs have problems, especially Medicare. But even the most financially troubled part of Medicare, the Hospital Trust Fund, is — thanks to the 2010 health care law — adequately financed until 2024. (Without the law, it would hit the financial skids in 2016.) And then, according to the Centers for Medicare and Medicaid Services, which runs the Medicare program, the Hospital Trust Fund could still cover 87 percent of its estimated obligations, and the other parts of the Medicare program would be unaffected.
As for Social Security, it’s good to pay full benefits until 2033. After that, without any tweaks to benefits or taxes? It could pay 75 percent of benefits from the payroll taxes it would continue to collect.
None of which is to say that we shouldn’t be figuring out how to guarantee the longer-term solvency of both programs. We need to, and the sooner the better.
It’s just that coming up with the right answers will be a lot easier if all of us — and especially journalists — know how to ask the right questions. — Kim Keister