Mitt Romney: No Apology: Chapter Six: The Worst Generation. Social Security, Medicare, Medicaid. Public Employee Benefits. Romney says, “Let Them Eat Cake To The Nations Middle Class And Poor.”

November 15, 2010 by
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Chapter Six draws its title from Tom Brokaw’s book about The Greatest Generation, the people who lived through the depression, fought WWII against Fascism and the Cold War against Communism. He doesn’t mention that these are the same people who elected Franklin Roosevelt, as their political leader during the depression and WWII, the man who was responsible for the New Deal. A policy that had a lot to do with this country remaining a democracy politically based on capitalist economic principles instead of turning to Fascism, Socialism, Communism or becoming a socialist democracy like England and other European countries.  So in the sense the way we are today is really the triumph of conservative principles when the World was going other ways.

The “worst generation” would be the generation that leaves the next generation with a bankrupt United States

The premise for this appellation is the increasing National Debt and his perception of unsustainable entitlement programs: Social Security, Medicare, Medicaid and Medicare Part D or the prescription drug program. He also addresses the benefit programs for public service workers who have unionized and extracted unsustainable benefit and pension programs from politicians afraid to say no to them.

These entitlement programs are the third rail of American politics and it is to his credit that he is willing to discuss them.

Social Security

He thinks that Social Security can be made solvent in the long run by some minor adjustments and he offers four possible solutions.

  1. 1. Raise the Social Security tax and or apply it to a greater share of an employee’s income or both. He leaves out all thoughts of a progressive tax. (God forbid.)
  2. 2. Gradually increase the retirement age. (This has been done up to 67. Not much room to move.)
  3. 3. Adjust benefits on the basis of the cost price index instead of the wage index which goes up much faster.
  4. 4. Allow earners to direct a portion of their Social Security taxes into individual retirement accounts like 401 k’s do now for private pensions. (After what Wall Street did to institutional investors recently. You wonder what would happen to individuals trying to guide their own investments with the advice of Wall Street.)
  5. 5. Another alternative not mentioned by Romney would be to continue to tax businesses for Social Security and Medicare obligations when they out source work outside the country as if the new employee was actually working in the U.S. This would preserve the social fabric of the middle and lower classes while leaving the wealthy to enjoy the stability of American society and culture.

As it is now payroll taxes would have to increase by 40 percent in twenty years to meet its Social Security obligations. This has to be considered with the fact there will be fewer workers supporting each retiree. An untenable political situation. (Obviously minor adjustments would solve the situation and would preserve a plan that works well and is valued by many.)

The Deficit Stategy

(He failed to mention that  the Bush tax cuts for the top 2% of  the wealthiest and unsupported by  cuts in spending  was a principle cause of the National Debt to balloon during his administration along with the War on Terror and the wars in Iraq and Afghanistan.  The 2% tax cut is unsustainable and it cost the government 700 billion in the last ten years and more in the future if not eliminated. Also it has no social, economic or political benefit to the stability of our democracy.

This tax cut of course is in line with the Republican orthodoxy of creating deficits, the brainchild of Grover Norquist and others, as means of cutting programs that benefit the middle class and the poor. 50% of retirees get half their income from Social Security and have medical peace of mind through Medicare.  This deficit strategy on all levels of government where conservative republicans have sway seems to be ubiquitous.  Witness the inability to fund programs for disabled children and the raising of student university fees seen in so many states today.)

Romney uses the deficit and reduced taxes as a rational for justifying reducing entitlement benefits and curbing benefits to public service workers. (While these problems are universally recognized, the methods of dealing with them differ. Boehner and McConnell cannot give up the idea that the 2% tax cut on the wealthiest which started the deficit spiral is sacred ground more so than the Entitlement programs that benefit all Americans in a positive way.)


However Romney says Medicare, which if unchecked will increase pay roll taxes by 250 percent in 20 years, cannot go on without major changes.   Romney suggests a flat rate per visit instead of an itemized charge for each thing done during a visit. A  Medicare program that is free to the patient and profitable to the provider who can order evermore diagnostic procedures and treatments will soon bankrupt the country.

Public Employee Benefit Programs

Benefit programs to public service employees will also bankrupt the communities they serve. (If they haven’t done so already.) Romney cites his experience when he ran for Governor of Massachusetts. He sought the support of the firefighters unions. He supported their commitment to fire safety, interoperable communications and other issues. However they wanted him to support a 25-75 plan.

After 25 years of service a firefighter could retire with 75% of the average of his highest three years salary. This meant that a man who began at 20 could retire at 45 and the state would pay benefits for the next thirty years, more than it cost for his 25 years of salary.

This individual could work elsewhere even for the state in another capacity. This would be an unsustainable cost to the public and he rejected the idea at the loss of union support. This problem is endemic throughout the United States and threatens to bankrupt the Cities, Counties and States who must tax its citizens to support these unreasonable benefits.


Medicaid is for the poor and a percentage is paid by the federal government with the balance borne by the individual state. Romney states a principle problem with Medicaid is that the wealthy escape the burdens of long term care by giving their wealth to their children and qualifying for Medicaid benefits to pay their nursing home bills.

In Sum

These problems must be addressed and soon or we will fall into a deficit trap it will be difficult if not impossible to escape.



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