How do we do it? First and foremost by reforming the biggest drivers of government debt: entitlement programs like Social Security and Medicare.
For decades, politicians have made entitlement promises that taxpayers can’t afford to keep. These programs tax today’s workers to pay benefits to retirees. The problem is, the politicians keep promising better and better benefits, even as the number of retirees increases faster than the number of people paying for them.
The problem is simple demographics. Back in 1960, there were five workers for every retiree. Today there are three workers for every beneficiary. In less than 20 years, the ratio will be two-to-one. There are simply not enough workers to pay benefits at current levels for the onslaught of Baby Boomer retirees now starting to enter the system. And retirees are living much longer, even as health-care costs are spinning out of control.
Recognizing these problems, our plan transforms Social Security and Medicare into real insurance programs, rather than the open-ended entitlements they are today.
We provide financial security to retirees and guarantee assistance to people who need it. Our plan does not lock in benefits for those who have no need for them, nor does it raise taxes to make sure the Bill Gateses of the world can get subsidized health care. Instead, government payments for the well-off are reduced, but their taxes, and their kids’ and grandkids’ taxes, are not raised. We keep government smaller and taxes lower.