Callahan lecturers say entitlement reform a must

Panel examines crises in Social security and Medicare funding

Participants in the Heller School's entitlements panel with members of the late Prof. James Callahan Jr.'s family.

Panels, from left, Dean Lisa Lynch, Prof. Stuart Altman, AARP's Robert G. Romasco and Prof. Lawrence Kotlikoff.

A panel of social policy experts at the first James Callahan Jr. Memorial Lecture said it is imperative that the United States reform the finances of its crisis-ridden entitlement programs.

Panelists were Stuart Altman, PhD, Sol C. Chaikin Professor of National Health Policy; Lisa Lynch, PhD, dean and Maurice B. Hexter Professor of Social and Economic Policy at the Heller School for Social Policy and Management; Lawrence Kotlikoff, PhD, professor of economics at Boston University, and Robert G. Romasco ‘69, president of the AARP, formerly the American Association of Retired Persons.  

Lynch defined the crisis in Social Security, where growth in recipients without commensurate revenue growth leaves a fiscal gap that will deplete the trust fund by 2035.  She also addressed the crisis in social security disability, where new applications have risen substantially in the recession, noting the program’s disincentives to beneficiaries to reach their employment potential.

Altman criticized the political system for a failure to solve the even larger crisis in Medicare, noting that the government and private health care sectors are inextricably intertwined.  He said the problem can be solved only through increased revenue and that cuts to provider payments will cause them to opt out of the system or leave beneficiaries with significant uncovered expenses.

Robert Romasco provided an overview of the AARP’s mission of helping people live out their lives with dignity and purpose in an increasingly long-lived society.  Medicare, he noted, covers only about two-thirds of costs for American retirees in a medical system that fails to deliver outcomes commensurate with costs.  His organization has been engaged in broad discussions of policy options with stakeholders, including systematic reforms.

Kotlikoff characterized U.S. entitlement programs as “systematic fiscal child abuse,” which places the burden of entitlements on future generations. Comparing the structure to a Ponzi scheme, he argued for a generationally fair policy solution including a clean-slate, individualized healthcare voucher program capped at ten percent of gross domestic product (GDP), freezing social security in its current form and adding a mandatory age-weighted investment and annuity program.

The newly-established lecture is supported by funds donated to the Heller School in Professor Callahan’s memory. Callahan was a beloved mentor and friend who was acting dean of the Heller School 1990-92).  He was the Commissioner of Mental Health for the Commonwealth of Massachusetts from 1983 to 1985, and Secretary of Elder Affairs from 1977-1979.  

Categories: Humanities and Social Sciences

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