Millennials weigh in on Social Security, Medicare

Young voters crave intelligent discussion about entitlements

BY BRIAN M. ROSENTHAL
THE SEATTLE TIMES (MCT)

SEATTLE – Jonathan Assink is a lifelong Democrat and unabashed supporter of Barack Obama.

But asked about the president’s plans for Social Security and Medicare, the 29-year-old shakes his head.

“There’s nothing there. It’s just, ‘We’ll protect it.’ Well, great, thanks. How?” said Assink, who lives in Edmonds and works as a barista in Seattle. “At least the other side talks about it.”

Assink is part of the generation with perhaps the most at stake and the least say in the future of entitlement programs that have long protected senior citizens but may run out of money to do so at the same level for future retirees.

Already disproportionately suffering from a weak economy, young Americans say they’re not counting on post-retirement government help. And they are not surprised that the debate over the programs is being driven largely by older people who wouldn’t suffer under the most serious proposals under consideration anyway.

Support private accounts
If politicians did listen, they might be surprised: Recent survey data indicate that Americans ages 18-29, despite being overwhelmingly liberal, support some conservative ideas for changing the structure of entitlement programs.

Roughly 86 percent of them favor allowing workers to put their Social Security taxes into a private account, as some Republicans have proposed, according to a November 2011 survey by the Washington, D.C.-based Pew Research Center.

That’s much more than the 52 percent of seniors who support the idea.

The Pew “Generation Gap and the 2012 election” study also found that 74 percent of millennials support allowing Medicare participants to “use benefits toward purchasing private insurance,” another GOP idea, which got backing from just 48 percent of those 65 and older.

It’s unclear if the youngest voting generation’s views on entitlements will affect this year’s presidential election.

Social Security primer
Interviews with Western Washington millennials indicate that most are not basing their votes on entitlements this time around.

And surveys, contradictorily, have found that despite their specific policy views, young people still say they trust Democrats on the issue.

The surveys also say that young people are among the most confused about exactly how Social Security and Medicare work. So here’s a primer:
Social Security, established in 1935 as part of the New Deal, is a support system for retirees, funded primarily by a payroll tax on wages up to $110,000 (employers and employees each pay 6.2 percent, although the employee share is temporarily 4.2 percent).

Because more people are retiring and fewer are working, the program is operating at a loss but still maintaining benefits due to its reserves. Those reserves are projected to run out in 2033, meaning the program will pay out less in benefits unless something changes.

Two of the most commonly discussed ways to avoid that are lifting the tax cap, from $110,000 to a higher wage amount, a more liberal idea, or raising the age at which seniors can access benefits, a more conservative idea. Other proposals include raising the tax level, lowering benefits for some or all beneficiaries, or putting the money into private accounts.

About Medicare
Medicare, on the other hand, was created in 1965 as part of the Great Society. It is a health insurance program for those 65 and older, with certain types of care provided, and is financed by a 2.9 percent payroll tax and congressional expenditures. But with the same generational dynamics at play in addition to skyrocketing health-care costs, the program is expected to run out of its reserves by 2024.

The solutions to Medicare are more complicated. But the idea that has stirred the most discussion was championed by U.S. Rep. Paul Ryan of Wisconsin.

Ryan, now the Republican vice presidential nominee, proposed replacing Medicare with a voucher system in which beneficiaries receive a credit toward purchasing private insurance. Critics fear that wouldn’t cover all of a recipient’s needs, however.

The Ryan proposal, like all of the serious proposals, would not affect current Medicare recipients or those approaching retirement.

Ryan’s running mate, Mitt Romney, has been more centrist. On Social Security, he wants to raise the retirement age and slow the rate of increase in benefits for wealthy individuals. He would give Medicare recipients the option of choosing a private plan, although they could also choose the current system.

Want real discussion
Obama has been less specific. He says he is open to raising the Social Security tax cap, and wants to make Medicare more efficient, with wealthy recipients perhaps paying higher premiums. He accuses Romney and Ryan of seeking to “end Medicare as we know it.”

It’s that type of rhetoric that is maddening to Chetan Chandrashekhar, an 18-year-old freshman at the University of Washington.

Chandrashekhar, who is studying urban planning, said he doesn’t think either side is discussing entitlement issues intelligently.

“The attack ads that we’ve seen against Paul Ryan about ending Medicare as we know it, they seem cheap,” he said. “We need to have a real discussion.”

Varying views
Bret Meaker, a Seattle accountant, said young people want major changes.

“The entire system needs to be overhauled,” the 33-year-old said.

While Meaker cautioned that her generation has varying views on entitlements, she said most agree on one thing: Social Security and Medicare are unlikely to provide them the same safety net that exists for seniors today.

“I think that if they are there, it will be in a very, very limited scope,” she said.

“I’m not counting on either.”

The uncertainty in the future is a hallmark of the generation in general, said Nathan Bowling, a history teacher at Tacoma’s Lincoln High School.

A combination of the recession, fear over entitlements and other factors will make millennials more frugal than others, the 33-year-old predicted.

Still, there are indications that young people’s cynicism may be misplaced: Despite the much-discussed projections, there are still many available policy options.

“Young people do seem to think it won’t be there at all,” said Hilary Pennington, director of The Generations Initiative, a new Seattle think tank focused on generational issues. “But it’s simply not true, and it could be highly influenced by what we do now.”