How Wisconsin could affect the future of Social Security and Medicare

Over the past week much of the nation’s attention has been focused on the relatively small state of Wisconsin, tadalafil where union employees and their families are voicing their opposition to a bill proposed by Republican Governor Scott Walker.  While the effect on the workers in Wisconsin is important by itself, buy viagra the Wisconsin debate may also have much larger implications for the country as a whole.  The protests in Wisconsin are more about how much public employee unions contribute to pensions or health care plans.  The protests are even about more than collective bargaining rights, pharmacy though that is certainly a better argument.  Ultimately, the protests in Wisconsin are about who will pay for the tax cuts passed over the previous three decades, and whether the country still believes in entitlement programs like Medicare and Social Security.

Governor Walker has argued that the wages and benefits of public employee unions are unsustainable given the tax revenue the state brings in.  What Gov. Walker neglects to mention is that just weeks earlier his administration helped decrease the government revenue by passing a number of tax cuts for businesses.  After working to decrease tax revenue in the state, Gov. Walker is now attempting to make the public employees give up their benefits, and their hard-fought collective bargaining rights to pay for the deficit of the state.

What many are missing is that the exact same reasoning could be used to effectively eliminate Social Security and Medicare in the future.  Republicans in Washington D.C., like Gov. Walker in Wisconsin, argue that the benefits given out by Social Security and Medicare are “unsustainable” given the current revenue of government.  Increasing tax revenues by raising the rate on the highest income earners is not even considered as a possibility by the GOP.  Instead, a growing number of Republicans are arguing that Social Security and Medicare must be cut back, or even eliminated altogether.  The House Budget Committee Chairman Paul Ryan (R-WI) has proposed a plan that would significantly cut back Social Security benefits and completely scrap Medicare in favor of a voucher system in the future.  Under Ryan’s plan seniors would be handed a voucher for about $6,000 and told to find their own private insurance.   If the voucher did not pay for the health insurance the senior would have to make up the difference or go without coverage.

There is, of course, a serious federal budget deficit which will continue to grow in the future if changes are not made.  However, Republicans neglect to mention that the tax cuts passed by President Reagan and President Bush largely created these deficits.  The last budget surplus occurred under President Clinton, who took the unpopular step of raising taxes on the rich at the start of his presidency.  In addition, Republican Presidents and legislatures have often failed to make contributions to the Social Security Trust Fund, essentially issuing IOU’s rather than putting real money into the fund.  Now, Republicans are asking the poor and middle class to pay for the tax cuts handed out to the rich over the previous 30 decades by giving up on Social Security and Medicare.

America has one of the lowest overall tax rates among the developed countries of the world (27.3% in American compared to a 36.2% averge for develped countries).  Due to loopholes and various deductions many of the wealthiest corporations in American pay next-to-nothing in taxes.  Billionaires and millionaires will pay a maximum of 35% of their income to taxes, though likely much less by taking advantage of similar deductions and loopholes.  From WWI until President Reagan came into office the wealthiest Americans paid over 70% of their income in taxes.  During that time period there was no talk of the need to cut back on Social Security or Medicare to solve the deficit problem.  Since Reagan came into office, Republicans, at times aided by Democrats, have systematically worked to lower the tax base.  Americans were told that the tax rates could be lowered while still maintaining valued programs like Social Security and Medicare.  Now, suddenly the poor and middle-class are being told that they are the ones who must suffer since the “voodoo economics” of Republicans has failed.

If Governor Walker succeeds in convincing the middle class must be the ones to pay for the deficit, then he will set a precedent for the national Republicans to demand the middle class pay for the federal deficit.  Meanwhile, the tax cuts for the rich will be held up as a sacred right not to be tampered in any way.  This is one of many reasons why Wisconsin is important to the whole country.

Source: Examiner

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