Politically impossible. Congress will never do this.
The Senate recently voted to do exactly that in their health care bill. They're a vote short now, but it's hardly unthinkable that some version of an independent Medicare/Medicaid commission could pass.
Goobieman said:
Can you show that this will provide any meaningful savings?
You dispute that raising the retirement age will save money? If the retirement age is 68 instead of 65, then everyone aged 65-67 who would otherwise be getting social security will not be. The savings seem pretty obvious.
Goobieman said:
And what about the negative consequences for doing so?
Will the AARP ever allow such a thing?
They'll certainly be against it, that's for sure. It just becomes a question of how much they're willing to fight a Democratic president on something that won't take effect for 10 years (and therefore won't affect many of their current members), how many Democrats are in Congress in the next session, and how much the Republicans (and hopefully the president) are actually willing to push the issue.
But social security is on a relatively manageable track anyway; Medicare/Medicaid are the entitlement programs that really have the potential to be a financial time bomb.
Goobieman said:
Can you show that this will provide any meaningful savings?
And what about the negative consequences for doing so?
The meaningful savings come from the fact that catastrophic health plans are more likely to reduce health care costs overall, as opposed to comprehensive plans. The problem with comprehensive plans is that the people using the service has no incentive to keep his costs down, because he doesn't pay for them (other than a small co-pay). That's why I'd rather transition to a catastrophic health insurance system. That way, no one would go bankrupt when they had a health emergency, but overall costs could be kept down for routine/common procedures.
As for the negative consequences of doing so...I can't really think of many. A few people who are already sick would probably be worse off for the first few years under the new system since they'd have higher deductibles (or higher taxes if they stuck with their old plans), but in the long run this would balance out.
Goobieman said:
Do those that are means-tested out have to pay into the system?
If the answer is no, will the AARP ever allow such a thing?
Yes, they would still have to pay into the system. The solutions I provided are for a specific goal:
Balancing the budget. I'm not interested in dismantling social security just for the sake of dismantling social security, I'm focusing on balancing the budget. If you reduce expenditures AND receipts, that isn't necessarily going to help the budget. My idea with this solution was to reduce expenditures while keeping receipts constant.
Goobieman said:
Can you show that this will provide any meaningful savings?
And what about the negative consequences for doing so?
I can't show you ironclad empirical data for this one since the economy is different than it was in the 1990s. But that's the closest we have: When the Bush tax cuts went into effect, it turned a small surplus into a large deficit. If taxes were raised a couple percentage points, it should have a similar reverse effect. The exact amount of this is impossible to measure though.
As for the negative consequences of doing so, assuming the economy recovers by 2012 they should be relatively minor. The economy did OK during the 1990s when income taxes were a couple percentage points higher.
Goobieman said:
Politically impossible. Congress will never do this.
These types of commissions already exist for things like military base closures. They just need to be expanded to the entire DoD.