AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (4 comments)

  1. The very first thing you have to decide is how much we can afford to allocate to entitlements and I’d say that process starts with deciding what we should allocate to National Defense – then what is left would be divided between the rest of govt and entitlements.

    but when your process is open-ended for both – the result is endless arguing and push back – what we have right now.

    We have available to us about 1.5T in general fund revenues

    How much of that do we want to allocate to National Defense?

    When I hear someone provide a number, I’ll know they are serious.

    As long as people avoid this reality, I know they are not.

  2. This idea is doomed to fail because conservatives have no desire to help government work or just modernize itself.The Republican Party desires an oligarchy all of their policies are designed for that system of governing.When the poor or non elite become empowered in this nation conservatives feel threatened.

  3. Since it is now accepted that there is no rigid relationship between payroll tax paid and social security benefits received, and since the amount of income subject to social security tax goes up each year with inflation, why not increase that cap by inflation plus some additional increase (for example maybe 20%) ad infinitum, without any corresponding increase in benefits? Perhaps this would raise enough revenue to reduce the employer and employee payroll tax rates. This is not an expert suggestion, because I’m obviously not an expert, so I welcome devastating criticism.

    1. there never was a “rigid” relationship. From the beginning it was called “insurance”.

      But social security is not the entitlement that is in trouble RIGHT NOW. It will have some problems – by no means fatal – downstream in a few years if some modest reforms are not made.

      the entitlements with the problems RIGHT NOW are Medicare Part B and MedicAid but those two together consume about a trillion and Medicare can be fixed relatively easily by increasing the premiums on par with how SS is means-tested already and requiring a mandatory 20% co-pay to require seniors to have some skin in the game.

      MedicAid is the harder one to deal with.

      but none of the above reforms can take place until we have some firm idea of what percent of our available revenues will go to National Defense.

      Without that decision – the back and forth between entitlements and other spending will continue on in an ideological war with no real intent to make decisions other than to advocate in essence that all entitlements are bad and have to be gotten rid of – a position that 80% of American voters oppose.

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