During the recent debates about increasing the federal debt ceiling, some in Congress suggested that Social Security and Medicare should be cut to pay our nation's bills. AARP and our members disagreed.
Our message to Washington was clear: Don't cut Social Security or Medicare to reduce the deficit. Frankly, Washington needs to get its own house in order and cut waste, crackdown on pork-barrel projects, and close tax loopholes instead of raiding our children and grandchildren's retirement funds. Social Security is a promise our nation has made to America's workers and their families, and to all current and future beneficiaries -- a promise that has endured for more than 77 years -- a promise that must be kept.
In a recent Review-Journal column (Dec. 25, "The scariest year-end list around"), Glenn Cook suggested that Social Security was broke; that the trust fund was gone. That is simply not true. The funds are in U.S. Treasury Bonds, the safest investment in the world. Those bonds are backed by the full faith and credit of the U.S. government, which has never defaulted on its commitments.
Social Security is currently able to pay full benefits through 2037 and after that, payroll taxes coming in are enough to cover roughly 75 percent of the promised benefits. Does that sound like "broke" to you?
Even though full benefits can be paid until 2037, AARP has long said that Congress should act sooner rather than later to address the program's benefit adequacy and long term solvency so that we can protect this lifeline both for future generations and for those who depend on it today.
In Nevada alone, 30 percent of those relying on Social Security would fall below the poverty line without it. And the benefits aren't generous. In 2009 and 2010, during the height of our economic recession, Social Security beneficiaries got no cost-of-living adjustment at all -- this despite increasing medical costs, utility bills, food prices and the cost of other basic services.
Medicare is a different story. Even though older Americans have paid through a lifetime of work for this benefit, Medicare costs are escalating at a rate faster than the money taken in through payroll taxes. This is part of an underlying problem of skyrocketing costs in health care overall. Washington's suggestion that we simply shift these costs to seniors already overburdened by medical bills does not address the problems of our current health care system. The typical Medicare beneficiary spends 20 percent or more out of his own pocket on health care. With the average senior living on less than $20,000 per year, high health care costs make difficult for many to make ends meet as it is.
We will continue to advocate for better controls over Medicare fraud, estimated to be as much as $80 billion a year; for allowing Medicare to negotiate better drug prices with the pharmaceutical industry, a practice currently forbidden; and for creating IT systems that reduce waste through better tracking of tests, procedures and information which can be shared among health care professionals.
At AARP, we feel that too many in Washington have the wrong priorities. The president and Congress have just spent the last year talking behind closed doors about cutting Social Security and Medicare to help close the nation's budget gap -- with little attention to the views of their constituents. What they should be doing is listening to Americans, who -- whether they're Republicans, Democrats or Independents -- want Washington to work to strengthen Medicare and Social Security for future generations.
That's what we'll be doing. And by the way, we won't be retiring anytime soon.
Carla Sloan is state director of AARP Nevada. She writes from Las Vegas.