I‘ve criticized Mitt Romney on a number of occasions for being unserious about reforming entitlements. Over the course of his campaign, he’s attacked Texas Gov. Rick Perry, repeatedly, for criticizing Social Security as a Ponzi scheme, and declared at at a Florida senior citizen community that, “when you see your friends with signs that say keep your hands off our Medicare, they are absolutely right.” But now, with a USA Today op-ed, Romney has begun to lay out his approach to reforming entitlements.
In the op-ed, Romney said we have to “ensure that both Medicare and Social Security are made sustainable for future generations.” To do that, he writes:
On that latter point, Romney is referencing an idea known as progressive price-indexing. Basically, right now, initial Social Security benefits are tied to growth in wages, but the system would save money by tying them to prices instead, which tend to grow at a slower rate. Instead of tying everybody’s benefits to prices, one common proposal is to move to that system only for those with higher incomes. Last year, the CBO estimated that depending on where the income threshold is set, in 2040, Social Security spending would be around 6-7 percent lower under this option. It wouldn’t make the program solvent by itself, but it’s a sensible idea that could be part of the solution. It’s disappointing, however, that Romney’s proposals are only about tweaking the current Social Security system, rather than seriously reforming it for younger generations, so they could have the choice to invest at least a portion of their payroll taxes in personal accounts.
Romney goes a bit further when it comes to Medicare:
Essentially, he’s come around to where Tim Pawlenty was a few months ago in supporting an optional version of House Budget Chairman Rep. Paul Ryan’s idea for transforming Medicare. It must be said that Ryan himself has said that he’d be open to this possibility, but I’m very skeptical that it would produce the same budgetary savings. Many of the same arguments against the so-called “public option” during the health care debate would apply here. It would be difficult to have a level-playing field and genuine competition when one of the plans has the power of the federal government behind it. The Medicare plan would be able to set lower prices and then shift the costs to the private plans, plus you’d have Democrats and groups like AARP scaring seniors about leaving traditional Medicare. The success of the Ryan plan is contingent on the idea that moving the health care system to one in which consumers have incentives to save money will bring down costs. But it’s hard to see that transformation happening as long as you’re preserving traditional Medicare as an option. An optional approach might be better than what we have now, but it’s just hard to see how it would achieve anywhere near the savings of the Ryan plan.
Ultimately, of course, campaign plans don’t matter unless there’s a realistic chance that the candidate would actually implement the ideas as president. My major beef with Romney, aside from the health care plan he enacted in Massachusetts, has been that his record of changing his positions on so many issues makes me skeptical he’d have the political courage to tackle controversial issues as president. That overall skepticism still remains. But it’s positive that he’s at least taken a minimum half step forward during a GOP primary.
