Social Security and Medicare Defy Reform

Hillary Rodham Clinton may not win a U.S. Senate seat from New York (in fact, according to some, she still may not run). As the mixed reactions to her psychobabble-filled comments in the inaugural issue of Talk magazine suggest, not to mention her disastrous tryout as national health-care czarina, her political instincts are far from perfect.

But there's no question she understands why Social Security and Medicare are politically popular, and why there will likely be no serious reform of those programs until they actually collapse under their own fiscal contradictions.

In a speech at the National Education Association's Women's Equality Summit in March, she laid bare why Social Security and Medicare remain inviolable despite widespread acknowledgment both are inefficient and unsustainable.

Social Security, she said, is a "family protection system" that keeps families together by keeping generations apart.

"Were it not for Social Security," she elaborated, "many of us would be supporting our parents. We would take them in, we would do what we needed to do to try to provide the resources they required to stay above poverty, to live as comfortably as we could afford."

While one might think this is precisely the sort of extended family situation the author of "It Takes a Village" might value, nothing could be further from the truth.

"That would cause a lot of difficult decisions in our lives, wouldn't it?" she asked. "There would be many families who would have to choose between supporting a parent–an elderly parent–and sending a child to college.

"It becomes even more pronounced," she said, "if we add Medicare into that equation…. (Supporting parents or grandparents) would mean an economic responsibility and an economic burden that we would feel required to shoulder."

No one, the first lady implies, wants that: not seniors, not their middle-aged children and not their grandchildren. In suggesting this, she is playing generational politics at its most brazen–and its most effective.

She explicitly pits college hopefuls vs. retirees in a sort of death match, with the slouching-toward-retirement-itself baby boom generation standing in as the beleaguered yet altruistic referee.

After conjuring images of resentful teens and needy elders fighting over the TV remote in family rooms across the country–if not food, clothing and shelter–she offers up a rationale that everyone cannot only live with, but feel good about.

"In a very real sense," she said, "Medicare and Social Security say to our older people: We're going to help you remain independent…because of what you've done for our country–the families you've raised, the jobs you've held, the incomes that you've contributed to the United States, the wars you've fought–we're going to help, as a nation, to support you.

"And by doing so," she continued, "we're going to free up the resources that might otherwise have to come directly to you from your family, so that they can do what you did–raise the next generation, send their children to college, hold down the jobs that enable them to move forward."

The first lady's scenario is simply mumbo-jumbo.

The "resources" she speaks of "freeing up" are the payroll contributions everyone makes into the system–15.4 percent, split between employee and employer, on the first $72,600 of every individual's wages.

Had "older people," whom she seems to assume have no savings or retirement benefits apart from Social Security, not been forced to pay into a system that produces negative returns compared with private-sector pension plans, it's unclear how much largess they would require from their children or grandchildren.

Similarly, if "younger people" were allowed to invest their Social Security taxes, they might throw off enough wealth to comfortably support Grandpa.

True to her boomer roots, her encomium to senior citizens is undercut by her barely concealed hostility at the thought of "shouldering" responsibility for them, even as she lays the groundwork for today's youth to support her cohort in its dotage.

She offers each age group good reason, however, not to mess with programs delivering "independence," however fictive such autonomy might be.

And in so doing, she has helped explain why, precisely at a moment when the country is flush with cash and might have seriously reformed programs that are set to implode within a decade or so, conversation about reform seems to have lapsed into silence.

Indeed, the ongoing legislative fight over what to do with part of the federal budget surplus underscores that Social Security and Medicare enjoy deep and abiding support.

The GOP-controlled Congress has proposed a 10-year, $792 billion tax- cut plan, while the Clinton administration wants to draw the line at a figure closer to $250 billion.

While Republicans and Democrats dicker over the size and scope of modest tax reform, they are in absolute agreement when it comes to preserving the "fiscal integrity" of the country's old-age programs.

In fact, the Republicans, who not so long ago had been speaking loudly about privatizing at least part of Social Security, have lately been crowing instead that the president, who "originally proposed protecting only 62 percent of Social Security receipts…(has) bowed to GOP demands to protect 100 percent" of all contributions.

In so baldly articulating the reasons why Social Security and Medicare have enduring appeal, Hillary Clinton helps to explain why the reform talk has been replaced with something else altogether.

And why the prospects for true reform of these old-age programs are sadly disappearing.