With another showdown on the debt ceiling looming, CEOs from America’s biggest companies have given the White House and Congress a series of proposals for entitlement reform, some of which are familiar by now:
As well as proposing rises in the eligibility age for Medicare from 65 and for Social Security from 67, the BRT [Business Roundtable] is embracing a contentious plan championed by Paul Ryan, the Republican chairman of the budget committee and former vice-presidential nominee, to turn Medicare into a “premium support” system. . . .The CEOs are also backing further means-testing health benefits, requiring higher premiums for the wealthy. The BRT recommended a less generous measure of inflation to calculate cost of living adjustments for retirement cheques, and stronger incentives to promote private pension plans.
The Business Roundtable supported higher taxes on the wealthy during the fiscal cliff negotiations and has opposed Republican demands for spending cuts during the debt ceiling debates. As far as we can tell, these proposals come from people who seek a grand bargain and are willing to put pressure on both parties to get one.Raising the eligibility age to 70 and increasing means testing make sense, but reforms like these will be bitterly resisted. This is a surprising show of spine by the Business Roundtable, going far beyond anything the President or Democrats in Congress have said they would accept. The best explanation for these proposals is that the people who best understand how our economy works are deeply troubled by the direction of entitlement spending.Sooner or later changes like these will probably be made. But it’s worth remembering that developing a more productive, efficient and cheaper health care system would ease many of the tradeoffs as we struggle to put the federal budget on a sustainable path.