By David Morgan
WASHINGTON, Jan 16 (Reuters) - A business group of top
executives on Wednesday proposed reforms to Social Security and
Medicare that would raise the enrollment age for both programs
to 70 but not raise Social Security taxes paid by upper-income
Americans.
The Business Roundtable, which represents more than 200
chief executives from some of the largest U.S. corporations,
also urged Congress to add a "premium support" mechanism to
Medicare, peg Social Security cost-of-living adjustments to a
lower inflation gauge and raise Medicare charges for wealthier
beneficiaries.
This strategy for "modernizing and protecting our social
safety net" would save $300 billion in Medicare spending over
the next 10 years, make Social Security solvent for 75 years and
help foster stronger economic growth, the group estimated.
The proposals come as President Barack Obama and Congress
prepare for an intensive new round of deficit-reduction talks.
Safety net programs including Social Security and Medicare are
likely to take center stage.
The CEOs intend to pitch their ideas to the White House and
to congressional officials.
"We are calling on President Obama and Congress to look at
our plan and enact a package of gradual changes that will
provide economic and personal security for generations to come,"
said Gary Loveman, CEO of casino and hotel company Caesars
Entertainment Corp.
The former Harvard economist chairs the Business
Roundtable's health and retirement committee.
Social Security and Medicare, once considered untouchable by
U.S. politicians, are now at the foreground of deficit talks
because of an aging population and rising healthcare costs that
threaten to overwhelm the U.S. budget in years to come.
Proposals to raise the Medicare eligibility age to 67 from
65 and base Social Security payments on a slower growing
"chained-CPI" are already part of the deficit discussion on
Capitol Hill.
The group would push the age at which full Social Security
benefits are paid to 70 for those now aged 54 and under.
Currently, the age for collecting full benefits depends on year
of birth, Someone born between 1946 and 1953 can take full
benefits at age 66. That will rise to age 67 for individuals
born in 1960 or after.
The group said sluggish economic and job growth, and
bipartisan divisions in Washington, could make it easier for
lawmakers to go farther in considering "politically risky"
proposals such as Medicare premium support.
Those supports, which opinion polls have shown are broadly
opposed by registered voters, would replace current Medicare
benefits with a financial stipend for purchasing coverage from
private insurers or the traditional program.
"There's nothing like impending pain to focus the mind, and
the conditions the American economy faces are much more serious
and sustained than any ... experience in my lifetime," Loveman
said.
But the group rejected shoring up Social Security by making
incomes above the maximum annual threshold - which in 2012 was
$110,100 - subject to payroll taxes, saying that would hurt the
economy.
"You would have to raise the base upon which the taxes are
applied very substantially to drive a sufficient level of
revenue to address the long-term solvency of the program,"
Loveman said.
"That would be far more damaging to economic growth than
what we're asking people to consider," he added. "If you raise
the tax rate on people who earn over the current threshold,
you'll have an immediate deleterious effect on employment and
economic activity."
The Business Roundtable plan would also encourage private
savings and include newly hired state and local government
workers in the Social Security system.
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