I am a more or less blue person in a very red state. So I don’t write my representatives in Congress very often. I do lobby my state legislators whom I know personally and have a pretty good rapport with. But every now and then my economist self joins the fray and, having spent my career in a very conservative department, I practice the art of framing my argument from the right of where they are. Today it was Social Security and Medicare, and I was not lying when I said I was a fiscal conservative. I am. And this is a fiscally conservative argument.
I am writing to you because I am concerned about the future of Social Security and Medicare. I know that both parties are committed to their survival and fiscal health. It is an intergenerational contract that has been with us for 88 years and one that our children and grandchildren are counting on as a safety net for their retirement.
As a fiscal conservative, I believe that we must pay for what we get from government. Since these two programs are supported by FICA contributions, that source is the right place to look for funding. These Social Security and Medicare contributions are NOT taxes. They represent the cost of a retirement pension and insurance premiums for health care and for the possibility of outliving one’s assets. They are grounded in the ability to pay by making them a percent of income, and like many state defined benefit programs, they come with an employer match as deferred compensation and purchase of insurance
I would recommend a modest increase in the employer and employee premium from 7.6% to 8% and a significant increase in the wage cap to provide the additional funds.
Thank you for your consideration.
Holley H. Ulbrich
Alumni Distinguished Professor Emerita of Economics, Clemson University