Taking Entitlement Reform to the Campaign Trail
America needs specific proposals on entitlements.


However, hope is not lost. It has been refreshing to see Congressman Paul Ryan and Republican presidential candidates move past the rhetoric and offer solutions, opening up a frank and honest public discussion in the process.

Last month, I released a comprehensive jobs plan that included my proposals to save and personalize both Social Security and Medicare, preserving them for seniors and future generations.

I call for five actions to save Social Security. The first four proposals put the system on a path to solvency. The fifth proposal actually saves the system for our children and grandchildren.

  1. Raise the retirement age. When Social Security was created in 1935, life expectancy was 64 years and the earliest retirement age to collect benefits was 65. Today, the average American lives 14 years longer, retires three years earlier, and spends 20 years in retirement. It’s time to index the Normal Retirement Age (NRA) to life expectancy. It’s something that should have been done decades ago.
  2. Incentivize later retirement. If workers believe a portion of their Social Security income will not be returned to them as benefits, they have little or no incentive to retire later. We should exempt workers from paying Social Security taxes on income if they choose to work past the NRA. It’s a win-win, benefiting both the individual and the government.
  3. Encourage private-retirement savings. We should remove limits on the amount of tax-deferred contributions individuals can make to their IRAs, 401(k)s, and other plans. Individuals don’t need government constantly looking over their shoulders — they can take personal responsibility for their retirement savings.
  4. Recalculate the Cost of Living Adjustment (COLA) for lower inflation. The COLA currently overstates inflation, as it is calculated based on the Consumer Price Index for Urban Wage Earner and Clerical Workers (CPI-W). Instead, COLA should be based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), which is regarded by economists as the most accurate estimate of economic inflation available. Calculating COLA on C-CPI-U would result in $217 billion in savings over ten years according to the CBO, and would be more representative of the actual cost of living in the real world.
  5. Create Personal Retirement Accounts (PRAs). PRAs would give younger Americans more control over their retirement savings. Yearly contribution limits would increase over time, eventually allowing individuals to contribute 4 percent of their payroll taxes to their accounts. Most important, since everyone would have their own PRA, Congress would no longer be able to raid that money to spend on other programs. The PRA system gives every American the opportunity to build a larger nest egg and invest in reliable securities.

Medicare faces similar problems. The CBO projects that Medicare spending will skyrocket from 3.6 percent of GDP today to 12 percent by 2080. If we fail to reform Medicare, seniors will face massive cuts to the benefits they rely on and have earned.

In order to save Medicare, we should move to a premium-support model like the system provided to members of Congress. House Budget Committee chairman Paul Ryan has offered a plan to do just this. It would offer seniors more choice and independence. Seniors would be free to choose whatever certified coverage plan works best for them, with Medicare providing subsidies to help them pay for it. Individuals with lower incomes would receive more funds from vouchers and would be eligible for additional Medicaid coverage.

This proposal keeps the federal government’s commitment to all adults over age 55 and would be phased in for younger Americans, personalizing the system while making sure they still have guaranteed coverage options when they reach the Medicare eligibility age.

These reforms are commonsense but necessary proposals to save our entitlement programs. Getting to the Senate and fighting for these reforms will undoubtedly be difficult, and met with strong resistance from the career politicians fighting to hang onto their jobs, but we can get this done. It will take leaders with the experience, knowledge, and courage to draft legislation and present it to the American people, properly framing the narrative as a “do or die” moment for the country. We can no longer afford to play politics and retreat from the monumental challenges we face.

My plan is entitled “An American Opportunity” because I believe we have one last chance to halt the nation’s current path to bankruptcy and rebuild our economy to empower a dynamic and entrepreneurial private sector. However, we can do so only if we begin electing leaders who are willing to sacrifice their political careers in order to make those necessary reforms.

— Tom Leppert served as mayor of Dallas from 2007 to 2011. He is now a Republican candidate for U.S. Senate.


Sign up for free NRO e-mails today:

NRO Polls on LockerDome

Subscribe to National Review