REPOST ARTICLE SOURCE:
I walked into the Economist Buttonwood Conference to hear Mitt Romney’s chief economic adviser– Glenn Hubbard, the Dean of Columbia Graduate School of Business– bluntly claim that the nation “cannot afford a large welfare state for everyone,” underscoring the brutal political fight to develop after Nov. election day over the extent of entitlement programs like Social Security and Medicare.
More stunning yet was the revelation I had not heard previously that unlike retired workers from the private sector, there have never been funds set aside for benefits on behalf several million federal government employees, especially members of all the Armed Forces. There has never been any accumulation from their compensation monthly pay checks to trust funds for Social Security or Medicare that would protect them in retirement. This is an astonishing and expensive hole in the safety network of a significant part of the population.
Rather, these liabilities must be included in each annual year’s budget, and so are another growing burden against the effort to balance the budget. In other words, Retirement benefits for Army, Navy and Air Force veterans could be threatened by the political struggle over reducing the federal budget deficit the next several years. I had never seen this revelation spelled out before in such stark detail. The way benefits for veterans is handled seems another serious problem in restraining the climbing rate of health spending as well as the retirement benefits of millions of government workers and service men and women. No wonder this burden can be considered motivation for introducing a means test on the dollar amount of health care for individuals earning above a certain amount of money, say $200,000 a year.