When a political leader takes a tough position on a politically difficult issue affecting our future standard of living, he deserves credit. Case in point: Governor Chris Christie’s speech last Tuesday at the New Hampshire Institute of Politics. His subject was entitlement reform.
The Governor argues what is demonstrably clear: the Social Security System and Medicare are not affordable over the long term as they are currently constituted. He is calling for change, although that change would not affect “seniors currently in these programs or seniors approaching retirement.” In essence, then, he would take the Boomers out of the discussion.
For Social Security, Christie proposes the following:
- he would gradually raise the retirement age, beginning in 2022 to 69;
- he would at the same time eliminate the payroll tax for “working seniors”; and,
- he would introduce “means-testing” affecting those with non-Social Security income of over $80,000 per years and phase out Social Security payments entirely for those that have $200,000 a year in other income.
Christie would introduce similar changes in Medicare as well as reforms to the much abused disability insurance system.
Liberal Democrats, such as the late Senator Edward Kennedy, opposed even modest mean-testing (as did FDR) because their view was that the system could not be sustained unless all Americans received Social Security benefits. This is why nowadays they would increase Social Security payments for everyone while raising the lid on the amount of taxable income subject to FICA.
Christie implicitly counters this strategy when he appeals to the charitable instincts of the wealthy: “if you are fortunate enough not to need [benefits], you will have paid into a system that will continue to help Americans who need it most. That is what we have always done for each other through private charity and good government.”
People are referring to Christie’s speech with the usual nonsense about it being the spark for a “national conversation” about entitlements. Given the reluctance of politicians to talk about the issue, Christie’s spark will likely fall on wet kindling unless voters insist otherwise.