(CNSNews.com) – When unveiling a proposal to reform Medicare alongside Senator Tom Coburn (R-Okla.), Senator Joe Lieberman (I-Conn.) warned that the entitlement program will eventually “go broke” and lead to a “fiscal disaster” for the United States.
“Each Medicare enrollee will on the average take almost three times more out in Medicare benefits than they contribute in payroll taxes and premiums,” Lieberman said during a press conference at the Capitol on Tuesday.
“That’s why we say that the status quo of Medicare is unsustainable. And what we mean is that if we do nothing, Medicare will go broke and take our government down with it.”
Senators Coburn and Lieberman claim their proposal would save more than $600 billion over 10 years and reduce Medicare’s 75-year unfunded liabilities by about $10 trillion.
Their plan also would require wealthier Americans to pay for more of their Medicare benefits out of pocket. Individuals with income between $85,000 and $107,000 would pay $12,500 ($170,000-$214,000 for married couples); individuals with income between $107,000 and $160,000 would pay $17,500 ($214,000 - $320,000 for married couples) and individuals with income between $160,000 and $213,000 ($320,000 for married couples) would pay $22,500.
The proposal would also increase the age of eligibility by two months each year starting with individuals who were born in 1949 (those who turn 65 in 2014) until the eligibility age reaches 67 in 2025 where it would remain for each year thereafter.
“Each part of our proposal will make some group of people unhappy and will provide easy target for attack by those who understandably want to preserve the status quo but the status quo only leads to the collapse of Medicare and fiscal disaster for our country,” said Lieberman.
Sen. Coburn said that every American will “suffer” if Medicare is not changed now.
“Medicare has to be fixed. We have to change it. You can live in la la land and say, ‘no it’s going to stay the same.’ It isn’t going to stay the same. Even if the Congress doesn’t do anything, it isn’t going to stay the same because we’re not going to be able to borrow the money to afford it and what people don’t realize is there’s a debt wall coming in the world,” said Coburn.
“It’s going to hit next July where the world’s demand for sovereign debt is 13 trillion dollars and the world’s liquidity to fund it is 9 trillion. If we don’t have our house in order by that time, every American -- whether you’re in Medicare or not -- is going to suffer precipitously.”