(Editor's note: This is the fourth in a series of articles examining the prospects and promises of President-elect George W. Bush. Everyday this week, leading up to Saturday's inauguration, The Dartmouth will consider a major issue that Bush will have to address during his presidency.)
During his campaign, President-elect George W. Bush put Social Security and Medicare reform at center stage. But as his inauguration approaches and the actuality of his presidency sets in, the question arises of how successful he will be with the reforms he has proposed.
For starters, here are a few definitions: Medicare is administered by the Health Care Financing Administration, and it is the nation's largest health insurance program, which covers 39 million Americans who are 65 years of age or older as well as some disabled people under 65.
The Social Security system was created in 1935 to help support senior Americans during the Great Depression and has become a mainstay of U.S. social safety net programs.
Social Security and Part A of Medicare -- or hospital care -- are largely financed by payroll taxes. In other words, when workers pay their part into the system, a portion of the money is doled out to current Social Security recipients. The remainder of the money that enters the system goes into the Social Security Trust Fund, which is saved for future use.
Both Medicare and Social Security may face major financial problems within the next few decades. Democrats and Republicans both recognize that the systems must either be reformed or taxes must be raised to keep the systems functional.
The 17-member National Bipartisan Commission on the Future of Medicare was created as part of the Balanced Budget Act in 1997. But the reform plan introduced by the committee, which would have provided protections to low-income seniors, was not approved.
Bush said he plans to follow through on the commission's efforts.
"Our nation must reform Medicare -- and, in doing so, ensure that prescription drugs are affordable and available for every senior who needs them," he said during the campaign.
"Seniors deserve a wider scope of coverage, and they deserve to have more choices among health plans. Over the last few years, both Republicans and Democrats have embraced these goals," he said.
Accordingly, Bush plans to guarantee that senior citizens and the disabled continue to have access to benefits. He has said that all Medicare recipients should be given the opportunity to choose comprehensive health plans that reflect their healthcare requirements.
He also has advocated that low income seniors should be able to have access to prescription drugs. In addition, he has said that Medicare must provide access for seniors to the latest medical advances.
Bush wants to achieve all of the supports that he advocates for Medicare by reforming the system rather than raising payroll taxes.
It seems likely that early on in his presidency, Bush will try to include further subsidies -- including pharmaceutical supports -- into the Medicare system.
On the other hand, it is less likely that he will make early strides on the Social Security front even though the system faces imminent problems as the baby boom generation approaches retirement.
The New York Times reported in October that in 1960, there were more than five workers for every Social Security beneficiary and that today there are 3.3. By 2030, the figure will be two.
The American Association for Retired People is the largest and arguably most powerful interest group in the country and is known for opposing major changes to the Social Security system. To make any move that would anger AARP would not be a good game plan for future re-election
Bush said during his campaign that he wants to revamp the ailing Social Security system, but sticking with his campaign mantra, he said he planed to remove responsibility from the government and put it in the hands of the people.
"I want a commission that will end up with a set of procedures and recommendations that will achieve some objectives," Bush said recently. One objective is "to help or people to manage their own accounts ... with the full understanding that it's going to be necessary to be sure people have good retirement benefits."
His Social Security proposal rests on the idea of personal investment accounts instead of pooled payroll taxes. In Bush's plan, people will pay into personal investment accounts and earn returns based on Wall Street's performance.
This system would shift Social Security from "pay-as-you-go" to an individually planned program.
However, the Gore camp contested throughout the campaign that Bush's proposal was too risky an undertaking. In the Oct. 3 debate, Gore accused, "I give a new incentive for younger workers to invest their own money ... [under Bush's plan] your future benefits would be cut by the amount that's diverted into the stock market. And if you make bad investments, that's too bad."
Bush countered, "Your plan is 'Social Security plus huge debt.' If we don't trust younger workers to manage some of their own money, it's going to be impossible to bridge the gap without causing huge payroll taxes or major benefit reductions."
Bush has also said throughout his campaign that he would be willing to consider raising the retirement age for Social Security.
According to an article published Monday in the Wall Street Journal, "Education initiatives, tax cuts and prescription-drug subsidies for needy seniors all rank higher on the president-elect's to-do list with Congress" than Social Security. The article predicted that Social Security reform would not happen until 2002.
However, Bush claimed, "I'm not interested in delaying a decision," last week, while acknowledging that "a commission sometimes provides a lever for no action."
(Due to The Dartmouth's inauguration series, Politicking Weekly will not appear this week.)
