Entitlement Reform

Policy Issues

Each of the three biggest federal government programs – Medicare, Medicaid and Social Security – is headed for insolvency within the not too distant future.

It’s past time to get serious about reforming these programs; together they account for about 45% of total federal spending and will soon top 50%.

There are few easy choices here, but there are many promising ideas for reining in the problem which, unresolved, will only get worse – dangerously so – the longer it persists.

Proposals like block-granting Medicaid, converting Medicare to a premium support program and similarly revising Social Security by giving workers more control over their retirement savings and investments have to be considered.

It would also be worth considering proposals to gradually raise the eligibility age for these programs and for means-testing them. Limiting Social Security and Medicare benefits for more affluent retirees who would need them less, or not at all, could provide significant savings to the system.