Clearly a lot of people and particularly those on extended unemployment benefits would be impacted immediately and significantly if the country went over the "fiscal cliff" but if the choice is between yet another stop gap continuing resolution" that allows the solutions to US's problems to be punted down the road perhaps for another 4 years or a crisis that forces our politicians to bargain hard over a few months to come up with a comprehensive solution then I would be in favor of the latter. A crisis is likely necessary to get the Republican party to back down form its no new taxes under any circumstances pledge and President Obama to stand for something other than an alternative that keeps the extreme Republicans from controlling all 3 branches of government. I think confidence in America would actually rise dramatically if we went over a fiscal cliff and bounced back with the political extremes who drove us there suitably chastened.

While a "grand, bipartisan" deficit deal is TVD's highest aspiration, many of us are unwilling to cave to the Republican drive to slash Medicare, Medicaid, and Social Security and put seniors and poor people deeper into the hole. While there are plenty of good ideas in the Simpson-Bowles report, such as limiting the mortgage interest deduction, its recommendation to raise the Social Security eligibility age to 67 is a nonstarter. TVD and other advocates of raising the eligibility age for Social Security and Medicare have never explained how older people could survive financially while waiting longer for full benefits, given the rampant workplace age discrimination that exists and the fact that many people in their 60s simply can't continue working. The Simpson-Bowles "hardship exemption" provision is a joke. President Obama has said he's open to parts of Simpson-Bowles. But no way should it be simply adopted whole. And TVD refuses to acknowledge that congressional Republicans rejected it because it contains lots of revenue raisers.

The whole point of Simpson-Bowles is that one has to adopt all of it to actually solve the USs long term fiscal deficits. If you or President Obama are only open to parts of the plan then you have to suggest alternatives or stick you head in the sand and face an even bigger problem in the future

But what really worries me is when Mr. Meyer, like many on the left, says "...many of us are unwilling to cave to the Republican drive to slash Medicare, Medicaid, and Social Security and put seniors and poor people deeper into the hole." This attitude ignores the proverbial elephant in the room, which is that these programs will bankrupt the US government unless something is done to reform them. "The Rich" don't have enough money to keep them going at the current rate. Even "The Rich" and the middle class don't have enough, and the middle class contains much more total wealth. Even Paul Ryan says that his plan sounds draconian, but that's because we've waited so long to address this issue. The longer we wait, the more painful the reform becomes. This scares me, because all these "safety net" programs are going to bite the dust some time in my 80s at the latest. Great way to enjoy your "golden years." At least I've got almost a half acre that could be used for raising vegetables. If I can still afford the property taxes in 2040.

Yes but Ryan's plan would not have to be as draconian as it is if (1) he was willing to cut defense expenditures to what is actually needed to protect our country and its interests and (2) he was willing to raise taxes a relatively modest amount on the rich and middle classes. That is why we need to compromise.

Dbreneman, employers are not reluctant to hire older workers because they're afraid they'll quit in a few years. They would rather hire younger workers because while older workers tend to have a better work ethic (yes, stereotype, I know), they also tend not to be quite a technologically sharp (a stereotype that's probably factual). The jobs simply aren't there for older workers.

If you think the safety net won't be there when you're 80 and you're only approaching the age-discrimination age, you're pretty unrealistic. The safety net is in shreds right now for everyh"one, including older people. The only people who don't have to worry are "The Rich", as you term them. Romney and his family aren't worrying.

Sarah90 -

As I understand it, Social Security is currently taking in more money than it pays out. Plus there is a large fund of money (at least on the books) in surplus. So in essence, it's still cash flow positive with a large reserve. Most people agree by raising the income cap, it could be largely fixed as well. How does this equate to your saying, "The Safety net is in shreds?"

Now compare this to the federal government, which runs HUGE, MASSIVE deficits every year, year after year after year.

Why don't people like you say, "The Federal Government is in shreds?"
Why doesn't Paul Ryan or Mitt Romney??

Why the double standard??

Some of the comments illustrate the present political problem.

When it comes to entitlement programs (i.e., Social Security and Medicare), which benefit everyone regardless of income, we face the fact that these are simple income-transfar programs---i.e., working citizens finance the benefits for retired citizens. The idea that
there are "Social Security retirement accounts" for individual citizens is fiction. With the retirement of the boomer generation,
there will not be enough working citizens to finance the growing number of retirees. So adjustments must be made to keep Social Security and Medicare sustainable. They presently are not.
Democrats and Republicans disagree on the means of keeping them sustainable but, in fact, they are not that far apart and found common ground, for instance, in Simpson-Bowles. There is no point in hurling accusations in either direction that one party or another wants to hurt senior citizens or destroy the programs. This is nonsense.

Both parties, and their present presidential nominees, have stated that they want to get rid of "tax expenditures" which cut a huge hole in the federal revenue base and distort economic activity. But they have moved slowly lest they offend powerful interest groups whose backlash could hurt them in an election year.

Taking mutual action now on entitlements and some tax reform, however,
could be accepted by leaders of both parties over the present short-term choices of keeping/discarding some or all of the Bush tax cuts and
making big arbitary cuts in Defense and discretionary (i.e., non-entitlement) spending. The latter includes spending for everything from student loans to infrastructure investment to Food Stamps.

Why is bipartisan action necessary? It is because the GOP presently controls the House, Democrats the Senate, and Democrats the White House. Divided government in which nothing important can get done
without some cooperation with the opposition party. After November,
it is possible that Democrats could control the White House and both houses of Congress. Or that Republicans would have such control.
It is more likely, however, that divided government will continue.
This reflects the situation in the country. The electorate is closely divided and strong partisans, rather than moderates, are in control of each party. More numerous than either Democrats or Republicans, however, are independents who lack strong party loyalty and swing back and forth, election to election. This reality argues that leaders of both political parties must move off harsh partisan positions or we will remain in gridlock and unable to address seriously any major issue---including, notably, the issue of the crushing long-term debt
which over time will hurt everyone at every income level.

I watched President Obama's speech. His comment about Simpson-Bowles was so fleeting, I didn't get the sense that moving forward on the deficit and our long-term finances was a high priority.

The Social Security Administration trustees have some very sobering words. They write:

Social Security and Medicare are the two largest federal programs, accounting for 36 percent of federal expenditures in fiscal year 2011.

...

Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

http://www.ssa.gov/oact/trsum/index.html

Now, there are several issues here. First, they assume there will be an economic recovery. Second, I don't know what they are assuming about the number of people who are going on Social Security Disability, but it seems to have gone up quite a bit.

Third, they are assuming social security payments will be made by redeeming the assets held in the US Treasury bonds:

"Redemption of trust fund assets from the General Fund of the Treasury will provide the resources needed to offset the annual cash-flow deficits."

And where does this money come from? Why from more borrowing by the US Treasury. Who will ever pay this back?

I do a lot of volunteer work with tween-age children: youth sports, math club, etc. I feel so sorry for them and their financial future because we keep borrowing and borrowing and borrowing and borrowing and borrowing.

Stuart: The President's comment about negotiating on the basis of Simpson-Bowles might have seemed fleeting. But it was not there by accident. If GOP congressional leaders, and Romney-Ryan, were to take him up on it, something could happen. I do think it unlikely that Obama will take the initiative now on his own. Mainly, I think, he was innoculating himself against earlier criticism that he'd erred by
walking away from Simpson-Bowles in 2010. But deals sometimes do get made in the wake of such declarations.

It is not only long-term debt we should worry about. As my piece pointed out, the Dec. 3l "fiscal cliff" package, as it now stands, will cut GDP to zero or worse in 2013---without doing anything at all about either entitlement or tax-code reform.

Stuart: Of course I meant to say the "fiscal cliff" package would cut
GDP growth, not GDP, to zero or worse in 2013. If it cut GDP to zero, that would be some cliff.

It's impossible to have a reality-based discussion with Ted Van Dyk because he refuses to acknowlege the current reality of the Republican Party. As congressional experts Norm Ornstein and Thomas Mann have said, the Republicans are the source of the current congressional dysfunction. It's not a case of both parties being at fault. Once again, the long-term Social Security solvency issue could be largely solved by raising the cap on income subject to the payroll tax (and even better would be including investment income in the payroll tax). And once again, the Medicare and Medicaid cost problems can only be solved by controlling costs in the overall U.S. health care system, not simply shifting Medicare and Medicaid costs to beneficiaries, most of whom cannot afford higher costs. There are things that Democrats and old-line Republicans could agree on to control social insurance costs, but old-line Republicans no longer walk the Earth. So forget that fantasy, Ted. It is absolutely necessary to confront the necessity of military spending cuts and ending the higher-end Bush tax cuts. Most Americans are not willing to accept cuts in vital social insurance programs unless military spending and fairer taxes on wealthier Americans are first addressed.

I do not disagree that Republican party is extreme and a large part of the problem but the Democrats are also contributing. President Obama's biggest mistake on entering office was ceding control of his signature health care reform to Democratic House so that instead of incorporating some sensible Republican suggestions (reducing the incentives for health care litigation so that malpractice insurance is not such a big chunk of the cost we pay; finding more ways to increase competition; avoiding micromanagement by the federal government through overly prescriptive and overly long legislation; providing states more opportunities to experiment), he allowed the Nancy Pelosi and extremists in his own part to polarize the issue, shut the Republicans out and risk the law being overturned in the event of a change of government.

Since our own Senator Murray stance as co-Chair on the United States Congress Joint Select Committee on Deficit Reduction was to cede no ground and thus ensure that the Democrats would play their role in ensuring it would fail and since as Ted notes she has publicly stated that the Democrats (if not the country) would be best served by precipitating a fiscal crisis that can be blamed on the Republicans, I am not sure how you can claim that the Democrats are not contributing to the problem. If most Americans were "not willing to accept cuts in vital social insurance programs unless military spending and fairer taxes on wealthier Americans are first addressed" as you say then presumably in a few months we will have Democrats in charge of the House, Senate and Oval Office.

re "in a few months" - yes, this is the really odd thing about this election. The Presidential candidates do not seem focused on trying to help elect members of Congress who will work with them. In the case of President Obama, this may be a lesson learned from 2010, when his efforts were not successful.

As to "public opinion" - no one ever wants to make choices or give up "entitlements." Borrowing has long been the easy way out. A poll's findings always depend on how questions are asked: what would the poll results be if the question was prefaced with something along this line: "starting in 2010, the social security benefits people received were funded in part by drawing on general fund revenues, not just by payroll contributions." Now, there are ways to finesse the funding of social security, but at some point, it is either payroll taxes or general funds. What would people's answers be then?

Actually, David, medical malpractice-related costs account for quite a modest share of U.S. health care costs, and states like California and Texas that have sharply capped damages have seen no moderation in overall health care costs. See my policy briefs on this for the Robert Wood Johnson Foundation:
http://www.rwjf.org/files/research/whataretheissuessurroundingmedicalliabilityreform.pdf
http://www.rwjf.org/files/research/whatarethebestwaystocontrolmedicalliabilitycosts.pdf
According to Karen Tumulty of Time Magazine, President Obama in May 2009 told GOP congressional leaders he was willing to give them "tort reform" if they would support his health reform legislation. They never responded.
In terms of greater state flexibility, the Affordable Care Act actually gives states quite a bit of flexibility and autonomy within a broader national framework, such as letting the states set up their own health insurance exchanges and design their own minimum benefit packages (and even allowing states to opt out and create their own universal coverage model). Congressional Democratic leaders actually incorporated dozens or even hundreds of Republican amendments into the Affordable Care Act.
But the Republicans never stepped forward and offered any overall compromise proposal, despite Senate Finance Committee chair Max Baucus spending a full year meeting with top Senate Republicans and trying to work out a deal. So let's lay to rest the myth that Republicans were shut out of the process.

The real costs of malpractice-claims are actually subject of considerable debate because the indirect cost of physicians practicing defensive medicine are notoriously difficult to calculate.

I think many doctors practice defensive revenue streams as well. More tests = more money. I mean, who wouldn't do that? Whether it's an insurance company or the Federal government paying, if you know you can get paid for a test, why not run it?

Yes, I cover that in my RWJF articles. But the best estimates still indicate that med mal costs related to "defensive medicine" are modest, and the whole idea that doctors practice defensive medicine is controversial.

Medicine in the US is incredibly inefficient compared to other countries with similar quality of care based on statistical measures. This is so even when one compares only the segment of the population with medical insurance (i.e., accounts for the fact that the US does badly statistically in terms of such measures as life expectancy and expectancy of good health, compared to countries with universal health care because a segment of our population has limited access to health care)

One reason is that there is an enormous amount of over treatment in the US medical system which arises from some combination of (1) financial incentives to providers; (2) patient demand; (3) a lack of effective data collection to assess patient outcomes for a given treatment; (4) defensive medicine and (5) perhaps other causes. I do not know how one objectively separates all these different causes but a sensible approach to health care reform is to attempt to address all of them rather than just select those do not offend special interests.

In any given year, about 20% of surgeons in some field are involved in a procedure that leads to a malpractice claim. Since these claims can drag on for years, litigation is a essentially a permanent part of these doctor's lives. Even if the direct costs are relatively small, how can the stress of being sued not affect doctor productivity and not influence how medicine is practiced in the US compared to other countries?

The retirement age must be raised. The argument about age discrimination and not being able to work are interesting, but they avoid the actuarial reality that people are living longer - far longer than when Social Security was conceived and lomger than when it was "reformed" in the early 1980s.

I'm happy to have the income cap raised a bit, but only if the retirement age is raised.

PJS -

Raising the retirement age may be fine for a lawyer or an accountant or someone who sits at a desk all day. What about a postal carrier who walks or drives a route every day? Or someone who does hard manual labor? You think a construction worker should stay on the job until age 70? What about a nurse? You want a nurse working until age 70?

People are certainly living longer. But that doesn't mean they are able to work productively and safely.

The point is not when people can or should retire. The point is when their retirement and lifestyle choices (yes, including career choices) should be subsidized by younger people or older people who choose to work longer.

I do not want to force people to work until they are 70 or 75 or whatever. But people have choices - including the number of children they have, how much they spend, how much they save and how they invest. If people want to retire earlier, they should do so - on their own nickel, not on mine.

My aunt was an RN who retired at 70. She happily worked until then, though she could have retired earlier, from a financial perspective. I intend to retire by 60, but I do not expect to ever receive a dime of Social Security money.

David -

One of my friends is in Nursing School. Here are some statistics the teach the nursing students:

140,000 hospitalized patients die each year related to medication errors.

In the average 300 bed hospital as many as 130,000 medication errors occur per year.

One example given was a 23 yo who was given an overdose of magnesium sulfate and arrested and now has permanent brain damage. What should the 'cap' be for that?? $5000? $20,000? What if this was your kid?

Or another example was when a nurse gave 25 mg of a medicine to a 40 yo patient instead of 2.5mg and the patient died. What is that worth?

There is very little evidence that the litigious nature of our society makes hospital's safer. Putting unfortunate victims through the crapshoot of a legal system where decisions take years and are sometimes decided on technicalities does seem particularly optimal. Other first world countries seemed to have found a way to deal with medical errors without the need for so many lawyers.

("In the average 300 bed hospital as many as 130,000 medication errors occur per year." - what a ridiculous statement - that means 1 medication error per day per bed? nobody would get out alive.)

Here is a very interesting story from 2011 in New York about the cost of insurance for OB GYNs. The article notes the drop in doctors delivering babies is due to several factors, but a major one is insurance rates.

http://www.northshorelij.com/NSLIJ/High+Med+Mal+Rates+Drive+Out+Ob+Gyns

One key quote:

>>A new report by Medical Liability Monitor indicates Nassau and Suffolk ob/gyns pay more than $204,000 in medical malpractice payments.

That’s only slightly higher than the $201,000 paid in Miami-Dade County, Fla., but more than 10 times the amount in many regions such as California, where obstetricians typically pay $13,400. California has a $250,000 cap on damages due to pain and suffering, reducing premiums.
>>

The article then notes a lot of OB GYNs will simply refuse high risk deliveries.

Another problem with the litigious approach to medical malpractice (medical mistakes might be a better phrase) is that it forces medical professionals to be secretive. The FAA long since learned that far from punishing pilots for making mistakes, it is critical to encourage them to report them without fear of retribution since that facilities the development of improved procedures and safety systems.

PJS, research shows a big gap in longevity gains between wealthier white people and less wealthy people and minority folks. And as Richard Borkowski smartly points out, many older people cannot continue working because of the nature of their work and/or their health status. So even if Americans are living longer (and again there's a sharp gap between wealthier and less-wealthy people), how are they supposed to support themselves while waiting longer for SS and Medicare benefits if they can't work? That's more than an "interesting" issue. It's life and death.
http://newamericamedia.org/2012/08/lost-decadeslongevity-declining-for-blacks-latinos-and-less-educated.php