Did you catch Tom Coburn on “Face the Nation” during the holidays? Coburn is a Republican senator from Oklahoma. He also happens to be a medical doctor. This western representative is a straight shooter with sterling conservative credentials. He served on the Simpson-Bowles Commission and is well-versed in the federal budget. Unlike Paul Ryan, he voted FOR the commission’s recommendations.
As we celebrate an agreement in Congress that averted the fiscal cliff, the more serious folks in the room are still wringing their hands over the inability to tackle the tough issues. Coburn offered two statistics that go to the heart of the problem.
He said that Medicare recipients today have paid into the system an average of $120,000. On average, they will collect $350,000. Current Social Security beneficiaries will receive, collectively, $21 trillion more than they paid into the system. This is the heart of the fight over entitlements and the reason it will be so difficult to enact reform.
Social Security and Medicare were born under Democratic presidents. At the time, they were controversial. Today, you can’t touch them without creating a firestorm. No doubt about it. Americans love their Social Security and Medicare.
While fingers point to the Democrats when it comes to the stalemate, the folks with the real problem with these programs are the Republicans. They talk about entitlement reform. They preach about the deficit problem. They point to the expansion of government as an evil. But they stop short of addressing the two Coburn stats that are so troublesome.
In the last two Presidential elections, the only age group the Republican party won was listed as “over 65.” How do you seriously address the two most cherished programs of this age group without losing your main constituency?
Alan Simpson, one of the co-chairs of the Simpson-Bowles Commission, took to You Tube to highlight the problem. Simpson issued a call to action to young people. He said, “These old coots will clean out the Treasury before you get there.” Note that Simpson is himself an “old coot.”
Both parties will have to step over the political cliff in a leap of faith if change is to occur. Coburn appeared on “Face the Nation” with Democratic Sen. Dick Durbin. Republicans and Democrats alike must agree to a path that will protect our cherished programs, and both must be willing to take the slings and arrows of a populace unwilling to sacrifice. Good luck, Cowboy!
>> Nancy Lottridge Anderson, Ph.D., CFA, is President of New Perspectives, Inc., in Ridgeland, 601-991-3158. She is also an Assistant Professor of Finance at Mississippi College. Her e-mail address is email@example.com, and her website is www.newper.com.