To get us beyond this impasse we need legislation that embraces the real and perceived best of both worlds. I have been trying to persuade someone in Ron Paul's campaign that the opt out will never make it out of congress and to President Paul's desk for signature. This outcome being all too likely, the surplus which is designated to subsidize the opt out ought to go unconditionally to the states for use as they choose.
I would prefer that we find ways to lower the Social Security portion of the payroll tax rate permanently for both businesses and individuals and pay for it by removing the cap. I would also like to see the funding for Medicare/Medicaid come from a value added tax or from increased tariffs on products from China and other dictatorial regimes. I think that private health insurance should be supplementary and catastrophic in a system of Medicare for all, giving insurance companies expanded opportunities to sell other insurance products as is done in the German system.
I know very well such a system is not going to be put into place in my life time, and so I voted for Obama, believing that he was serious about the public option and that such an option would be available to all US citizens and residents. I still believe that proposal is doable, given sufficient political will. Alas... such gumption and courage is unlikely to be summoned in Obama II. (When will big name progressives wake up to this obvious reality which is applicable to so many other policy choices in Obama II?!!!)
So... what if we made the following deal?: Allow every person 25 years and under to opt out of the Social Security and Medicare system and at the same time allow anyone to pay double on their Medicare payroll taxes in order to be eligible for all Medicare benefits prior to retirement. Dependent children of those who agreed to this option would be fully vested immediately.
Crunching numbers to see if this is doable, of course, could reveal that such a proposal would not fully fund current or future retirees' Medicare benefits. This is complicated by the reality that certainly there would have to be a provision for how those who have opted out may pay to opt back in. If, however, the balance sheets would work out, the surplus funds of Ron Paul's 50/50 transition plan could still be block-granted to the states.
Would you support such a covenant or is it a compromise too far? Love to hear your thoughts.