This was from my very first posting at
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=1135316


Mitt Romney has said "entitlement programs" such as Social Security should be cut back or made voluntary. This is necessary since these programs make up most of the budget of the United States and the deficit cannot be dealt with unless we change these programs. Making Social Security voluntary for young workers raises several questions. Should it be replaced with the equivalent to an "Individual Retirement Account" of some type? This idea would be the death of Social Security as we now know it. Would this IRA be the equal to Social Security, in any case of disability of a young worker? Will there be some type of guarantee against "market risk" for this replacement IRA? How would this change effect low pay workers who might not be able to contribute much money to an IRA type of account? Social Security is a guaranteed life-time benefit, what happens if a person outlives their IRA account? President Obama has said Social Security should be maintained, but reformed. Among the suggestions that have been put forward by study groups are: the retirement age being extended, perhaps to age 72, the cost of living adjustment should be reduced or eliminated, or the benefits paid could be reduced. For many Americans, Social Security is the biggest part of their post-retirement income, it is the safety net we all use, so the effect of any changes to the program could have a huge impact on people's lives.

The Social Security and Medicare programs are called "entitlement programs" because people pay a special tax in order to be "entitled" to them. In the case of "Social Security" it is the "FICA Payroll Tax." This tax can be thought of as being the equivalent to an insurance premium. Under the present "FICA Payroll Tax" system, the person who earns $110,000 pays the same exact amount in taxes as the person who earns $1,100,000, or $10,000,000. Mitt Romney had an income of $21.6 million in 2010; instead of a FICA tax of $1,404,000 without the cap, he paid $7,150. President Obama had an income of $1.72 million in 2010; instead of a FICA tax of $112,327 without the cap, he paid $7,150. The actual FICA tax rate for the ditch-digger, garbageman, or teacher is 10 or 100 or 1000 times that for a CEO, corporate financier, or government official. Rather then making it voluntary or reducing benefits or delaying the retirement age, shouldn't we be talking about ending the $110,000 cap on incomes that are taxed, while capping the present maximum benefit, and maintaining the cost of living adjustment? Adopting this program would mean the system would be fairer since the tax would then become a defined flat tax for all Americans rather then the present regressive tax. The Social Security trust fund should be put in a "locked box" which is not used as part of the General Federal Government Budget. The new taxes collected would help reduce the budget deficit by relieving the problem with the Social Security trust fund in the future. Perhaps if the increase in revenue was great enough, the FICA tax rate could be reduced for everyone. However, neither Mitt nor Obama has suggested this type of solution.

Uninsured medical costs was the biggest reason people filed for bankruptcy. In response to the problem of millions of Americans having no health insurance and being unable to pay for medical care if they got sick; President Obama proposed and passed the "Patient Protection and Affordable Care Act of 2009" (Obamacare). However, this was not a single payer system, based on Medicare, but rather it was based on a plan supported and signed by Mitt Romney in 2006 when he was Governor of Massachusetts. Both programs had individual mandates to require people without health insurance to purchase it from private companies, in many cases with financial assistance from the government. This makes no sense to me, why not expand Medicare to cover everyone. Why force people to buy insurance from the hodgepodge of insurance companies, each with their own administrative costs and policies, trying to maximize profits? The cost of this bureaucracy means that medical care in the United States costs almost twice that of any other country with a single payer system. Why not have the insurance companies offer a Medic-gap type and gold plated wrap-around policies? The government provides a safety-net floor which people can voluntarily build on.

Expanding Medicare to include all Americans would also be a benefit to Medicare; it will financially stabilize what is now the high-risk pool of the health insurance industry. A substantial majority of Medicare enrollees – roughly 87% have at least one chronic condition, and nearly half have three or more. The people covered by Medicare include 1) people age 65 and older, who are the most likely to have Heart Attacks, Strokes, Cancer, and other diseases related to age; 2) people who have permanent disabilities and receive Social Security Disability Insurance; 3) people with end-stage kidney disease which requires maintenance dialysis or a kidney transplant; 4) people with ALS (Lou Gehrig’s disease) which is a slow wasting away of the body. The common thread between both disease specific groups is, they are expensive to treat and there is no cure. By expanding Medicare to include everyone, you would be adding 10's of millions of people under 65, the vast majority of whom are healthy and seldom require medical care. These people would have the security of knowing if they did get seriously ill, they would be treated without the rigmarole of complex rules and regulations regarding pre-existing conditions, pre-authorization, and Coordination of benefits. Medicare would benefit from the inflow of low-risk money which otherwise would go to pay premiums to private for-profit insurance companies. Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from private insurers, which must manage their risk portfolio to guarantee their own solvency. Medicare is a pragmatic program that works and is supported by a vast majority of Americans; however ideologues would call it socialism.