The fiscal problems are so big and so fraught,
he says, the two parties will finally be forced to
work together for a change. “It’s going to force
us back into the old bipartisan way in which we
used to get work done around here,” he says. “I
see coming out of this better policies to address
the challenges our country faces.”
Republicans and Democrats each have favor-
ite ingredients—the GOP is pushing for cuts
to spending, including Medicare and Social
Security, and Democrats want higher taxes
for the wealthy. An AARP Bulletin poll found
public support for raising taxes to close the
deficit, strengthen Medicare and Social Se-
curity, and finance schools and highways, but
skepticism that agreement can be struck. The
coming months will show whether lawmakers
can compromise to come up with what many
experts say is needed—a federal budget that is
$4 trillion smaller over the next 10 years than
the $44 trillion it would be under current law.
Now is the time for action. If the two sides
don’t come to an agreement, the consequences
are significant. “Debt will continue to balloon.
We are borrowing one-third of everything we
spend right now,” says Isabel Sawhill, a budget
expert at the Brookings Institution.
Some of the options on the table could have
far-reaching impact on older Americans. Advocates have argued that Social Security, with its
own funding source, shouldn’t get drawn into
the debate over the deficit. And Medicare’s projected spending already was trimmed as part of
the health care reform bill. But economists and
political scientists on both sides of the ideological divide say no major work will be done on
the nation’s fiscal problems without including
both more tax revenue and cuts to programs
like Medicare and Social Security.
The long list of options to be considered for
Social Security include raising the retirement
age beyond the current limit of 67 and raising
the cap on wages (now $113,700) subject to
the payroll tax. While some Republicans advocate a long-term plan of premium support
for Medicare, other Medicare adjustments
being debated include raising the eligibility
age from 65 to 67; raising the premiums paid
by wealthier recipients; more closely linking
Medicare costs to inflation; and aligning costs
with medical outcomes instead of medical services provided.
“We have to be honest with the American
is a lot of pain involved,”
says Sawhill of the Brook-
ings Institution. “None of
this is easy.”
Hoagland says that the
time is right for a budget
deal that rewrites the tax
code. He sees parallels to
the bipartisan budget deal
of 1997 that led directly to
balanced budgets from
1998 to 2001. A second-
term president is leading
the way without worrying
about running for reelec-
tion, the nation is fed up
after the impasse of a year
ago, and the two parties
have outside pressures to
make a deal.
What if Social
Security and
Medicare
were cut?
“I could not
survive if I did not
have those key
elements.”
–Brenda Hong, 67,
Birmingham, Ala.
MAIN STREE T VOICES For the Bulletin’s
collection of interviews and portraits from across
the country, go to http://bit.ly/TPuP58
people,” Hoagland says. “We’ve overpromised.
There’s no way to do this without possible pain.”
“Older Americans care deeply about reducing
the deficit and about strengthening our econo-
my, and we’re hopeful a deal can be reached to
protect taxpayers and reduce unnecessary gov-
ernment spending,” says AARP Executive Vice
President Nancy LeaMond. “But raiding Medi-
care and Social Security to pay for other govern-
ment programs is shortsighted and harmful to
seniors and their kids and grandkids.”
Eventually, the discussion will focus on sim-
plifying the tax code: reforming it to raise rev-
enue by getting rid of several loopholes. But
some of the most expensive loopholes are also
the most popular—like deductions for home
mortgage interest and charitable contribu-
tions, and tax breaks businesses get for provid-
ing health insurance. “When you use the word
‘simplification,’ it doesn’t capture the fact there
Tamara Lytle is a Washington-based reporter
who has covered Congress and the White House.
