Brian Goldman | Friends without benefits

When we receive our first paychecks, we’ll gloss over the taxes that strip away from the total. But, as students and the future workforce of the country, we should be paying attention to one of these taxes: the payroll tax.

Specifically, we need to mobilize and ensure that Washington has the impetus to preserve entitlement programs, such as Social Security and Medicare, that we are currently paying into but are not set to survive for more than a decade or two. We need to force elected officials to reform these programs so they are still standing by the time we are old enough to retire.

Through payroll taxes, we will be contributing to programs that are undeniably on thin ice. Social Security is projected to dive further into the red. “After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers,” according to the Social Security Administration. Medicare is already projected to pay out more in benefits than received through taxes in “all future years,” and the account is estimated to run dry by 2024.

The only guarantee we have that the government will make good on its Social Security and Medicare obligations by the time the we retire is Washington’s promise that we will be taken care of. But these are the same politicians who promised that structural reforms would be voted on by November as part of the debt-ceiling deal.

The so-called Super Committee in charge of this process now appears wounded, beaten and down for the count by special interest groups, lobbyists and partisanship. Social Security and Medicare have rarely been honestly confronted by politicians on either side of the aisle for fear of electoral retribution. The upcoming 2012 elections will likely keep in place this status quo for the near future.

As students watching this charade play itself out time after time, we need to mobilize in favor of serious entitlement reform that will preserve these programs that we are beginning to pay into — and will continue to do so for many years to come.

Entitlement reform is discussed in the most partisan of terms — whether it is Democrats deriding Paul Ryan’s reform proposal or Republicans admonishing the healthcare bill’s reapportionment of $500 million from Medicare coffers.

And, just as cruelly, even when entitlement reform is taken seriously and studied (as done by the Bowles-Simpson commission), Congress and President Barack Obama still refused to stand behind the findings.

Despite the calls of some to neutralize the deficit solely through taxes as a way to maintain the current structure of federal programs, a recent report showed that taxing the wealthy at 100 percent of their income would still leave the United States running massive annual deficits of nearly $1 trillion.

Structural reforms are therefore necessary. Two ideas with bipartisan support — raising the retirement age and more efficiently distributing benefits — should be part of a broader solution and will help alleviate the financial pressures facing entitlement programs.

Since Social Security was implemented in 1937, the percentage of the population living past 65 has risen from 53 percent for males and 60 percent for females to 72 percent and 83 percent, respectively. Because of this increase of life expectancy, a raise of the retirement age is necessary to ensure that the number of beneficiaries doesn’t continue to grow out of control. Raising the retirement age to 68 for Social Security and 67 for Medicare will save approximately $200 billion annually by 2023.

Distributing benefits according to wealth — also known as means testing — is also a reform proposal that has the potential to be embraced by both sides of the aisle. To many people’s surprise, staunch Republican Sen. Tom Coburn released a report last week titled “Subsidies of the Rich and Famous” that supported limiting government benefits for wealthier beneficiaries. On the other end of the spectrum stands Obama, who has backed the notion of means testing benefits as part of entitlement reform.

Although the United States does not face the threat of immediate fiscal instability, both Democrats and Republicans recognize the perils of a growing national debt that consumes GDP.

Philosophical idealism or rote ideology does not change the basic mathematical discrepancy we face. As students, it’s our job to make sure that these reforms are structured to assist the future beneficiaries of the programs — us.

Brian Goldman is a College senior from Queens, N.Y. His email address is briangol@sas.upenn.edu. The Gold Standard appears every Monday.

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