The Corner

Seniors vs. Millennials

USA Today has a story today about the 2012 election’s underlying demographic duel. According to the article, the young overwhelmingly favor Obama, while those over 65 favor Romney.

In a national USA TODAY/Gallup Poll, most 65-and-older seniors support Romney while young adults under 30 back Obama by almost 2-1. The 18-percentage-point difference in their presidential choices is one of the electorate’s biggest demographic divides, and it helps define campaign strategies for both sides.

The enthusiasm of the Millennial Generation for Obama, who is now 50, fueled his election victory four years ago. Though still backing him, younger voters have lost some of their ardor while seniors have become significantly more engaged than in 2008 on behalf of the 65-year-old Romney — and they are much more likely to vote. At stake in this divide is not only the presidency but also the country’s policy direction — shaping the debate on Social Security and Medicare spending, the need to invest in education and the priority placed on environment.

I read this and I immediately wonder what are the chances, under these circumstances, that the Republican party will ever implement reform to programs like Medicare and Social Security. In recently years, GOPers have already been called the party of Medicare, because, among other reasons, they are responsible for policies like Medicare Part D. Also, it is hard to forget that one of their criticisms of the president’s health care plan was that the law would cut Medicare spending. One thing is sure, however: This voting base does explain why even one of the bolder reform plans out there shelters seniors from any changes today and refuses to touch Social Security.

Now, I am sure that the Republican party’s support for Medicare has nothing to do with younger Americans’ support for President Obama. The president has made it clear repeatedly that he is opposed to reforming Medicare or Social Security, anyway. It’s too bad, because Medicare and Social Security are the very definition of unsustainable. Both programs pay out more than they take in and cannot exist without constant tweaks, fixes, and adjustments. In addition, none of the adjustments and reforms that are made into actual law ever seem to be implemented. #more#Here is a good illustration provided by Peter Orszag:

A good illustration of how to do future deficit reduction the wrong way is the Sustainable Growth Rate formula for Medicare, which was enacted in 1997 to constrain payments to doctors. The SGR places a broad cap on payments without addressing any of the reasons those payments are increasing. If the cap is exceeded, payments are supposed to be simply cut across the board.

It’s much easier to slap a cap on spending than to get into the weeds of making policy changes to constrain that spending. It generally doesn’t work, though. Not surprisingly, Congress has repeatedly waived the SGR cap by legislating “doc fixes,” temporary patches that cancel the scheduled payment reductions. Although these interventions have not fully restored physician payments to what they would have been, the SGR has had much less effect than if it had been fully implemented.

We can expect that the same thing will happen with the Medicare savings included in Obamacare. What we are left with, then, is a future of higher taxes for workers and smaller or non-existent benefits for retirees. 

That means that younger generations have everything to lose (or to continue to lose) if we do not reform these two problems. That’s the case that Nick Gillespie and I make in “Generational Warfare: Old-age entitlements vs. the safety net,” in the latest issue of Reason. We write:

This fight is about old-age entitlements and whether the Me Generation will do what’s right for the country and stop sucking up more and more money from their children and grandchildren. 

Social Security and Medicare, which provide retirement and health insurance benefits for senior Americans, generally without regard to need, are funded by taxes on the relatively meager wages of younger Americans who will never enjoy anything close to the same benefits. From any serious fiscal or moral viewpoint, and particularly for the sake of helping those truly in need, Social Security and Medicare should be ended.

In the piece we argue that we should replace the current “entitlement” system which provides benefits on the sole merit of being 65 with a true safety net. We explain, for instance, that “focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens on the back of younger Americans and future generations is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system.”

And since Bob Dylan has been in the news so much in the last two days, I will conclude with the last paragraph in our piece:

Back in 1964, the last year of the baby boom, Bob Dylan warned: “There’s a battle outside / And it is ragin’ / It’ll soon shake your windows / And rattle your walls.” Born in 1941, Dylan has been receiving Social Security and Medicare—both programs have mandatory enrollment—for at least four years now. In 1964 he was singing to a very different America with very different concerns. But his song of generational war, so prophetic in its day, may well prove prescient again. 

The whole thing is here.


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