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Entitlement Reform
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No three programs define the domestic mission of the federal government of the 20th century more than Social Security, Medicare, and Medicaid. These programs were created during difficult times and were designed to bring retirement and health security to low income and old age Americans; and they have worked well. Today, nearly 50 million Americans rely on Social Security and Medicare and 38 million get their health care from Medicaid.
Unfortunately, this system is going bankrupt. What’s more, these three programs alone will consume 100% of the federal budget by the year 2040. Today they consume 60%. Because these programs operate on a pay-as-you-go basis, where current workers pay taxes to fund current beneficiaries, the ratio of worker to retiree will require the tax burden of the next generation of American workers to double simply to keep the status quo afloat. America’s retirement population is increasing by 100% while the working and taxpaying population is increasing by only 17%. According to the General Accountability Office, rather than taxing 18% of the U.S. Gross Domestic Product to finance the federal government (as it does today), these three programs will require a federal tax burden of 40% of GDP by 2040, simply to pay for today’s commitments.
Americans cannot succeed and compete with such a crushing tax burden. America will lose its greatness. The legacy of leaving the next generation with a higher standard of living will be lost.
We can do better.
We believe in the mission of retirement and health security. We think there are better solutions that give Americans the comfort of knowing their health care and retirement is secure by giving people ownership and control over such critical components of their lives. While millions of Americans have organized their lives around Medicare and Social Security, the guarantee of such benefits are only what Congress deems them to be in any given year. That’s not good enough, especially with the future wave of generational friction that is mounting.
Washington has proven itself incapable of managing Americans’ hard earned Social Security dollars. For example, under the current budget resolution, the federal government would spend at least a portion of the Social Security surplus for other federal spending every single year. With Social Security facing near-term financial difficulties, this is unacceptable. We will work to make it against the law to spend Social Security money collected from Americans on anything other than Social Security.
We support a plan to transform this 20th century entitlement system into a 21st century ownership system where citizens have real property rights to their health and retirement benefits. People should be able to build a nest egg that provides them with better benefits that are much more secure than a politician’s promise. The mission of health and retirement security can be realized by building a new system where people can own and increase their savings throughout their working years so they can rely on the retirement benefits that they are not only entitled to, but that they own.
Our goal is to transform this pay-as-you-go system into a fully funded system that harnesses the power of compound interest, patient-centered health care and converts this current multi-trillion dollar liability into a national asset where Americans continue to enjoy ever higher standards of living.
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