On January 30, Congressman John Larson (D-CT1) and over 200 cosponsors reintroduced the Social Security 2100 Act, a bill to markedly increase both future Social Security benefits and costs. The proposal seeks to do nothing less than to reset the Social Security policy discussion, in a manner similar to progressives’ ongoing quest for “Medicare for All.” But what would the real-world effects of this legislation actually be?
Charles Blahous holds the J. Fish and Lillian F. Smith Chair at the Mercatus Center and is a visiting fellow at the Hoover Institution. He recently served as a public trustee for Social Security and Medicare.
February 1, 2019, 5:04 PM EST
January 16, 2019, 12:47 PM EST
Last month, Morgan Stanley published a research report projecting that U.S. labor force growth will exceed Congressional Budget Office (CBO) projections starting in the 2020s, and also asserting that this faster growth “should” delay Social Security’s insolvency, “perhaps by decades.” Specifically, the report stated that “a faster increase in the pool of covered workers is an important factor in the Social Security Trustees’ ‘low cost’ scenario, which would delay the date at which the Social Security trust fund reserves could become depleted from 2034 to 2062.”
October 29, 2018, 2:55 PM EDT
Earlier this year, federal lawmakers established the Joint Select Committee on Solvency of Multiemployer Pension Plans to address an intensifying crisis in multiemployer pensions. A primary focus of the Committee, which is co-chaired by Senators Orrin Hatch (R-UT) and Sherrod Brown (D-OH), is the projected insolvency of our national multiemployer pension insurance system operated by the federally chartered Pension Benefit Guaranty Corporation (PBGC).
August 23, 2018, 9:28 AM EDT
My recently-published estimate of the federal costs of Medicare for All (M4A) continues to receive widespread public and press attention. The ongoing discussion has prompted a number of common questions about the study, which this article attempts to answer.
August 15, 2018, 3:41 PM EDT
Among public policy issues, Social Security is especially beset by myths and urban legends. These myths inhibit the enactment of legislation necessary to close its substantial financing shortfall. Press, public and policy makers alike would do well to disabuse themselves of the following widely circulated canards.
Even Doubling All Projected Individual and Corporate Income Taxes Could Not Finance Medicare for All
August 7, 2018, 9:43 AM EDT
Last week the Mercatus Center published my estimates of the cost of the Medicare for All (M4A) bill introduced in the US Senate by Senator Bernie Sanders (I-VT) along with 16 co-sponsors. Although my work on the study began several months ago, the moment of its publication was fortuitous, coinciding with the embrace of M4A by several political candidates across the country. As a result, the level of press attention and public commentary on the study has been overwhelming. AP provided the initial coverage on Monday, leading to several other good articles, such as this one in The Hill. On Wednesday I published a summary of the results in the Wall Street Journal. Countless pieces have been published about the study, including particularly insightful ones from Megan McArdle in the Washington Post and Chris Deaton at The Weekly Standard.
July 10, 2018, 11:05 AM EDT
On July 11 the Social Security Subcommittee of the Senate Finance Committee will hold a hearing on the importance of paid family leave for working American families. The Social Security Subcommittee will likely examine recent proposals to use the Social Security system to finance a paid parental leave benefit. I recently joined my Mercatus Center colleagues Veronique de Rugy and Jason Fichtner in co-authoring a policy brief outlining concerns about this concept and will elaborate upon those concerns here as a reference for the hearing.
June 8, 2018, 11:21 AM EDT
The 2018 Social Security and Medicare trustees’ reports have been released. For the first time in several years they contain some big (in addition to their usual bad) news: the combined Social Security trust funds and the Medicare Hospital Insurance (HI) trust fund will begin drawing down their reserves this year, on their respective ways to eventual depletion. In the case of Medicare HI, that depletion is now projected to occur in just eight short years, by 2026.
May 10, 2018, 2:19 PM EDT
A primary argument made for passing the Affordable Care Act (ACA, or so-called “Obamacare”) was that only such an expansion of the federal role in healthcare could successfully slow the growth of national health costs and thereby avert fiscal disaster. During the first few years after the law’s enactment, many of its supporters contended it was already accomplishing this, which other analysts strongly disputed. But more recently a quiet consensus has overtaken the former controversy: thus far the ACA’s cost-containment mechanisms are failing, and the net effect of the law has been to make our national healthcare affordability problem worse than it was.
Two Presidents, One Party in Control of Congress Are Responsible for Current and Projected Federal Deficits
April 30, 2018, 4:26 PM EDT
Last week’s New York Times column by David Leonhardt, asserting that “Democrats are the party of fiscal responsibility,” garnered many comments from those predisposed to agree with him. Leonhardt, rather than analyze how specific policy choices have contributed substantively to the federal fiscal imbalance, instead offered a sweeping characterization of the supposedly contrasting fiscal behaviors of the two major political parties. The column’s focus on partisan distinctions over policy choices undercuts its informational value, but beyond that its evaluations of the two parties’ historical fiscal policy behaviors are very wrong.
April 19, 2018, 10:17 AM EDT
An impassioned argument has broken out during the last few weeks over the federal budget. It was precipitated by an op-ed piece in the Washington Post by five prominent economists from the Hoover Institution, warning of a coming debt crisis and pointing the finger of blame at runaway federal entitlement spending. A riposte appeared in the Post soon after from several prominent left-of-center economists, headlined “Don’t Blame Entitlements” and highlighting the role of tax cuts in worsening federal deficits. Since then several others have weighed in on the controversy, including my E21 colleague Brian Riedl, my Mercatus colleague Veronique deRugy, Jim Capretta, Ryan Ellis and a further rejoinder from John Cochrane, one of the original Hoover group.
March 13, 2018, 9:38 AM EDT
One of the leading economic policy challenges of our time is the persistent decline in workforce participation among working-age Americans. Economists from left to right have cited declining workforce growth as one of the principal barriers to our future economic growth, and thus to our future prosperity. It’s important to understand the causes of declining workforce participation if we are to take effective action to mitigate it. Unfortunately, economists are still struggling to fully understand – let alone offer consensus solutions to – this problem.
March 8, 2018, 3:50 PM EST
The recently-enacted federal government spending law established a select congressional committee to craft a federal response to the escalating crisis of multiemployer pension underfunding. The committee has its work cut out for it with a particularly thorny policy challenge. The failure of too many multiemployer plan trustees to fund their pension promises adequately threatens both the retirement income security of millions of workers and the solvency of the nation’s pension insurance system. In previous columns I explained the basics of the problem as well as the potential threat to U.S. taxpayers. In this column I will offer suggested dos and don’ts for the committee as it goes about its difficult work.
January 12, 2018, 9:41 AM EST
One needn’t support the recently-enacted tax legislation to be disturbed by the tenor of much criticism of it. Many opponents, and indeed some press reporting, took for granted that if one voted for a significant tax cut after having expressed longstanding concerns about federal deficits, one must be an irredeemable hypocrite. But lower taxes and smaller deficits can coexist.
January 4, 2018, 3:12 PM EST
This coming Monday night, college football powerhouses Alabama and Georgia will meet in the sport’s purported “National Championship Game.” This year’s matchup is embarrassingly marred by the fact that Alabama and Georgia each lost earlier this season to Auburn, which was itself just beaten by Central Florida (UCF) in the Peach Bowl. UCF’s victory over Auburn put the crowning touch on its undefeated season, prompting athletic director Danny White to tweak Alabama, Georgia and the whole NCAA by declaring UCF to be “national champions.”
December 12, 2017, 4:11 PM EST
Reports are that America’s pension plans may be on the agenda as President Trump and the Congressional leadership work out an end-of-year deal to keep the government running beyond the two-week stopgap measure passed last week. It is yet unclear what such pension discussions might involve, but the financial stakes in this policy area are enormous. Massive underfunding currently threatens the solvency of workplace pension plans, in turn threatening pensioners with severe benefit cuts, employer sponsors with crushing obligations, and insolvency of the entire pension insurance system operated by the Pension Benefit Guaranty Corporation (PBGC).
November 20, 2017, 12:21 PM EST
Regardless of whether tax legislation is enacted resembling one of the plans now moving through the House and Senate, or whether instead legislation fails and current tax law remains on the books, US tax policy will be highly progressive in the sense of aggressively redistributing income away from richer Americans. That this is not a universally understood truth reflects poorly on the quality of our information-sharing and national policy discussion.
August 17, 2017, 10:20 AM EDT
The Congressional Budget Office has issued a new report on the projected effects of terminating cost-sharing reduction subsidy payments under the Affordable Care Act, as President Trump has repeatedly threatened to do. These findings are counterintuitive and surprising.
July 12, 2017, 10:40 AM EDT
Passions are high in the national health care debate. Some supporters of the Affordable Care Act (ACA) have taken to asserting that hundreds of thousands of “people will die” if it is repealed or significantly altered. These claims do not withstand scrutiny, and those who wish their policy arguments to be taken seriously would be well advised to avoid them.
June 28, 2017, 2:49 PM EDT
Earlier this month the Centers for Medicare and Medicaid Services (CMS) actuary published a score of the House bill to repeal and replace the Affordable Care Act (ACA).