During President Obama's press conference she asked him how we can get Republican support on entitlement reform which will require painful sacrifice. Apparently, Ms. Liasson wants painful cuts in Medicare and/or Social Security, but there is no reason that such cuts are necessary. According to the Congressional Budget Office, Social Security is fully funded through the year 2049 with no changes whatsoever. Medicare is projected to face serious shortfalls, but only because private sector health care costs are projected to grow explosively over the next four decades. Since Medicare pays for a large portion of private sector health care costs, the projected explosion in costs will have a devastating impact on Medicare and the budget as a whole. If the United States can fix its health care system to bring costs more in line with health care costs in other wealthy countries (all of whom have longer life expectancies), then there is no reason for painful cuts in Medicare. The problem is the power of interest groups like the insurance industry and the pharmaceutical industry, not the generosity of Medicare.
--Dean Baker
