It's depressing to think but the fiscal cliff agreement confirms my belief that we're past the point of no return when it comes to entitlement reform. There are simply too many elderly voters who will cow Congress to resist any changes to Social Security and Medicare. One of the ideas shot down was to increase the eligibility age for Medicare from 65 to 67. In 1965, the average life expectancy in the U.S. was 70.2 - now it is 78.8 years. Yet modernizing a half-century-old program to reflect this change is near-impossible.
Another idea to very slowly reduce the amount of spending on Social Security was switching to the "chained CPI" method of calculating inflation. As I noted before, this would shave $4/month of the cost-of-living adjustment to a typical Social Security benefit. In the WashPost, Robert Samuelson sounds the same note of incredulity:
Consider the highly technical proposal to shift from the standard consumer price index (CPI) to a "chained" CPI to adjust Social Security benefits. From 2013 to 2022, this change is estimated to reduce Social Security spending by $100 billion. Over that decade, total Social Security benefits are estimated at $10.588 trillion; the cut would be less than 1 percent. Yet, many Democrats reacted in horror, as if hordes of elderly would be impoverished.Really? Not even a 1% cut? The trajectory of Social Security (and Medicare) is that by current law those entitlement programs can only pay out what they take in from taxes once their respective trust funds are exhausted. Our "leaders" in Washington have made the calculation that those are problems for future Congresses.