Whitcomb: Future of Social Security, Medicare; Blowing Off Backup; Much Better Than Miami
Monday, June 11, 2018
-- Philip Perry, writing in Big Think
“Whoever is winning at the moment will always seem to be invincible’’
-- George Orwell
Especially given the aging of the U.S. population, it’s not surprising that there’s been considerable consternation about word from federal trustees that Medicare ‘s Hospital Insurance Trust Fund is expected to be depleted by 2026 at current rates -- three years earlier than in last year’s report. (The Social Security Trust Fund depletion date – 2034 – hasn’t changed from last year’s projection.)
There’s no reason to panic, say experts, because about 75 percent of Medicare benefits and 90 percent of Social Security benefits would be financed by dedicated tax revenue even if the trust funds were emptied. Actually, it would be virtually politically impossible to cut any benefits to older people, who vote more than other groups.
Still, the Medicare projection is unsettling, and it says something about the delusional thinking of many policymakers and large parts of the public. The main reasons for the shrinkage include:
The Republican tax-cut law has cut income taxes on Social Security benefits; some of this tax revenue goes into the Medicare trust fund.
The GOP has been discouraging people from using the Affordable Care Act’s private-insurance exchanges by eviscerating public-information programs and shortening sign-up times. Most importantly, the Republicans have killed the individual mandate to buy health insurance or pay a penalty. This is increasing the number of people without private insurance, swelling the payments from Medicare to cover what would otherwise be uncompensated hospital care.
Further, and making the future of Medicare cloudier (if no tax increases or benefit cuts are enacted), the Republican-run government has eliminated the Independent Payment Advisory Board, which was charged with finding ways to slow Medicare cost growth (and providing some lessons for cutting non-Medicare healthcare-cost growth, too).
No, the tax cuts, heavily weighted to the benefit of the rich, will not spawn an economic boom that will cause so much new economic activity that tax revenues will surge so much that they’ll cover the Medicare and Social Security deficits. The demographics are against that. Falling birth rates will mean fewer people to pay into Medicare and Social Security taxes to cover the swelling number of old people.
And we shouldn’t minimize the economic stabilizing effects of Social Security and Medicare. In recessions, they prop up purchasing power. Without them recessions would be deeper.
In short, either benefits, which aren’t extravagant on a person-by-person basis, must be cut, or taxes raised, or both, to ensure the long-term stability of systems that tens of millions of Americans rely on. Push may come to shove on all this in 2020, when many economists think that the next recession will start and tax revenues start to plummet. Given the swelling debt at virtually all levels, the recession could be a doozy.
The case of Gregory Hazian, the now ousted Rhode Island state lawyer who missed a May 23 deadline to appeal a court decision – a mistake that could cost taxpayers $24 million -- brings to mind how the failure to take simple, basically clerical actions can have very serious effects indeed.
The snafu involves an April 9 decision by Superior Court Judge Jeffrey Lanphear in a case of 59 nursing homes against the Raimondo administration. The nursing homes had argued — and the judge agreed — that the Raimondo administration had no legal authority to use a 2-percent rate reduction that lawmakers had placed in the fiscal 2016 budget for that year alone, in figuring how much to pay the nursing homes in later years.
Judge Lanphear ruled that at the end of that one year, the rates should have reverted to what they were before the reduction. Unless the ruling is reversed, the state would presumably have to pay the nursing homes an estimated $8 million a year for each of three years – thus the total of $24 million.
Running a human services agency is tough work, which requires competent people and oversight – including several layers of backup. The Hazian snafu is a lesson in all this. It would be good now for all state agencies to look into their systems and the background and competence of key employees. Governor Raimondo’s administration needs to offset the perils of the occasional chaos, incomplete information and political pressures of daily life in government by bolstering basic administrative controls. That includes backups.
And now we learn that Rhode Island Department of Transportation lawyers missed a critical deadline for responding to a multimillion-dollar claim by a contractor for a Providence bridge project, resulting in a Superior Court judge ruling in the contractor’s favor. This could cost the state $4 million.
Are these snafus unusual? Is this an only-in-Rhode-Island-case? Well, no. As a journalist, I closely followed state governments in Delaware, Massachusetts and Rhode Island and followed, albeit less closely, New York State government. Versions of this egregious oversight happened in them.
An office mate suggested that there should be a proviso allowing the anonymous filing of proposed bills in the Rhode Island General Assembly. If that happened, then such bills could be considered on their merits and not on the perceived importance or nonimportance or likeability (and party affiliation) of the legislators filing the bills.
The high score was explained by what were seen as reasonable (in regional terms) monthly housing and goods-and-services costs and the quality and quantity of its retirement and assisted-care facilities. Assisted-care establishments are certainly thick on the ground in Rhode Island, especially in Providence!
The highest-ranked cities: Portland, Ore.; Salt Lake City; Denver; Charlotte, and then Kansas City, Mo., and Providence, tied for fifth. The bottom three, by the way, are Miami, Houston and New York. (The first two have an increasing propensity to be underwater.)
Interestingly, the Providence area’s “lifestyle’’ ranking, a much better than average index score of 55.9, was brought down by a low volunteerism rate (18.6 percent, compared to a 50-city average of 24.7 percent) – something I have long lamented about Rhode Island. The highest rates of volunteerism tend to be concentrated in affluent parts of the state, such as Barrington, East Greenwich and the East Side of Providence. We need to widen that!
Something that used to surprise me a bit after the advent of the full-frontal Internet since the ‘90s is that the ability to work remotely has not hollowed out cities. Instead, big American cities have drawn increasing numbers of younger workers who are working on computers all day. You might think that more of them would want to live in beautiful countryside.
Such as in Vermont, which is trying to bribe some workers with up to $10,000 to move to the Green Mountain State, from which they’d work remotely for an out-of-state company. The Boston Globe reports:
“To qualify, workers must be employed full time with a company based outside Vermont, and move to the Green Mountain State on or after January 1, 2019. The worker must also perform most duties from a Vermont home office or co-working space. The state will then issue grants to newly minted Vermonters up to $5,000 per year for two years for things like moving expenses, Internet access, or a computer.’’
The main idea, of course, is to draw in more young people, including those who might want to grow a business in the state. Vermont has long had among the lowest unemployment rates in America, but has for years been among the three or four states with the oldest population. Policymakers worry about how to ensure long-term economic growth and how to lure and keep a large enough percentage of younger people to pay taxes to maintain the state’s good social services.
I think that the joys of working remotely have been overstated. Most people want daily, in-person interactions with co-workers, and many, especially the young, prefer the energy of a big city to the most beautiful quiet landscape.
In any event, little Vermont can’t afford to pay many folks to move to Vermont. But some refugees from city jobs will find Burlington’s rather hip charms, and view of the Adirondacks across Lake Champlain, suffice for urbanity.
Is this a solution to our affordable-housing shortage? There’s a been proliferation of “tiny houses’’ (a few hundred square feet each), some as resorts, since GoLocal started reporting on them in 2015. These structures tend to sell in the $10,000-$15,000 range. They maximize space with such features as cubbyhole storage under stairs, foldable beds, chairs and tables and loft-style bedrooms.
Of course, to move into them means getting rid of a lot of stuff. But that can be very liberating. But maybe they’d be better as guest houses….
Trying to force a Denver cake maker to design and sell a cake to a gay couple to celebrate their wedding struck me as ridiculous. The U.S. Supreme Court ruled 7-2 in favor of Jack Phillips, who considers himself a devout and traditional Christian, and against the Colorado Civil Rights Commission, which sought to punish Phillips for acting in defense of his religious views on gay marriage, which he opposes (and I support). This is not a matter of bias against people because of their gender or race but because of someone’s sincere disapproval of their behavior.
I wish that the gay couple had just gone to another store rather than sue some guy running such a tiny business. Find a big company to sue.
Views are changing but it will take a long time for many to change their minds about gay marriage. The Bible is rife with absurdities, contradictions, brutalities and bigotries as well as many deeply benign inspirations. (I am glad I was forced to read the entire Old and New Testaments in school, though much of it was tedious.) But some folks believe, or want to believe, that the whole thing is the word of God. And political demagogues and rich TV evangelist con men who don’t believe a word of it like to say it’s all literally true too, which appeals to people who fear dying and seek (with most of us) a sense of order in what seems a cruel and chaotic world. So be it.
Because the college had a couple of big auditoriums and the New Hampshire Primary was the election year’s first, all the major candidates would come through over the years. You'd be having breakfast in Hal’s Restaurant look up and there would be a candidate shaking everyone’s hands in the smoky greasy spoon.
I knew that this second big assassination of the year, after that of Martin Luther King Jr., would pour a lot more poison into the waters of that year; the rioting at the Democratic National Convention in August vividly demonstrated it. It was awful.
And while many think of ’68 as a sort of high tide of liberalism, it was actually a more fertile ground for reaction, as many reacted with anger to the youth culture, demand for rights for black people, economic progressivism and rising crime rates (especially in the cities) with revulsion. All you had to do is go a few miles outside of Hanover, N.H., our lovely college town, and into a diner off the newly built Interstate and hear opposition to ‘60s reformism.
So in the general election, Richard Nixon and George Wallace, the racist Alabama governor, got 56.9 percent of the popular vote against Democratic Vice President Hubert Humphrey, the kindly, old-fashioned, New Deal-style liberal who got 42.7 percent. The romantics like to think that RFK would have won the general election. I doubt it. He had plenty of heavy baggage and the country was generally heading right that year.
(Oddly, Nixon often governed as an innovative liberal in domestic matters, whatever his occasional wrapped-in-the-flag right-wing rhetoric, but Democrats weren’t ready to give him much credit for anything. Then he basically went insane.)
Anyway, ’68 was a notably nasty year in many ways, though the economy was doing swimmingly, albeit with a swelling federal deficit to pay for the Great Society and the Vietnam War. But for us up in the hills of New Hampshire the nastiness was generally confined to what we saw on the television, which was then in its apex of influence. We experienced a kind of eerie sense of detachment, except when we thought about the draft.
Trump cultists complain that the Mueller investigation of the Trump mob’s collusion/treason with Russia, a U.S. enemy, and a sea of other corruption is taking too long. They might not know that the Watergate case went from June 1972 to August 1974, when Nixon resigned. (I watched it then as an editor at The Wall Street Journal.) It would have gone on much longer if President Ford hadn’t pardoned his predecessor.
Many have wondered if international crook and former Trump campaign chief Paul Manafort will eventually sing like a canary to Mueller’s team. Maybe not. He’ll want to protect his family and himself from Vladimir Putin’s thugs.
People showing dignity as they approach what might be imminent death always present a moving sight. Consider the late-middle-aged lady and her kindly if very proper-looking husband in a waiting room at the Miriam Hospital, in Providence. The woman was obviously in pain and her very thin hair suggested that she was suffering through chemotherapy. The couple sat there quietly, occasionally murmuring affectionately to each other in what I saw as a display of quiet love.
That reminded me of a boyhood friend, Tim Whittemore, whom I visited as he sat in the den of his family’s house, down the road from ours, watching TV shortly before he died of an inoperable brain cancer. He was 13 and knew that he was dying and yet chatted calmly with me for half an hour before he became too tired and I left. Dignity and self-possession. The way we should live long before we know we will soon die.
We’re in prime hiking season, and so I suggest reading On Trails: An Exploration (Simon & Schuster), by Robert Moor. As the promo for this beautiful travelogue says: “It’s a groundbreaking exploration of how trails help us understand the world – from tiny ant trails to hiking paths that span continents, from interstate highways to the Internet.’’
There’s lots of rich stuff about the Appalachian Trail, especially about Moor’s complex reactions to hiking it and its quirky creator. (I’ve spent some time on it; it’s grandeur, gloom, green and gray.) There’s plenty of science, philosophy and top-notch and often lyrical nature writing. And he addresses that central question: How do we choose a path through life?
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