Part of a series on issues in the race for Senate.
Democratic U.S. Sen. Bob Casey calls his Republican opponent's proposals for ensuring the survival of Social Security and Medicare "radical."
Tom Smith says the senator has no plan to save either program.
"These aren't Medicare ideas that they have," Mr. Casey said of Mr. Smith's proposals, which involve some privatization. "This is a radical agenda to change how we take care of folks, how we provide basic benefits. ... Think about the pattern. Take away the guaranteed benefit from Medicare. Social Security in the private market. It's an ideological takeover of American life. And it's radical. It's not Democrat or Republican, it's radical."
Mr. Smith said he at least has a plan.
"What is his plan?" he asked. "I would love to discuss Sen. Bob Casey's plan with you - if he had ever brought one forward."
Neither Social Security nor Medicare is in immediate danger, but their insolvency has grown nearer as the years have passed, the economy tanked and less payroll taxes flowed into both trust funds because fewer people are working.
In April, the trustees of the programs said Social Security would no longer be able to pay full benefits after 2033, three years earlier than estimated last year, Medicare after 2024, the same as last year's estimate.
After 2033, Social Security would only be able to pay 75 percent of benefits. After 2024, Medicare could only afford to pay 87 percent of bills.
"As we know, Social Security is on the path to bankruptcy," Mr. Smith said. "And we haven't had this discussion. We haven't had it, period. We just keep putting it off and putting it off. Now's the time to do that."
Both men agree a key to extending the programs' solvency is to boost the economy, but even when the economy was humming along in the 1990s, the future ability of both to pay full benefits was in doubt, though further in the future.
Mr. Smith says optional privatization of Social Security and Medicare is the answer.
For Social Security, Mr. Smith says keep the program unchanged for anyone 55 or older.
"Now people that are younger than that, I want them to have the option if they choose - it's their choice - to invest a portion of their Social Security money in private accounts so they control it and they have it," he said. "It's not mandated."
He suggested allowing younger people to put 25 to 30 percent of their payroll taxes in a private account.
Supporters of this idea say that over time, people with money in private accounts will actually have more retirement money and that will lessen the burden on the Social Security Trust Fund. Opponents say it will hurt the system by removing payroll taxes that pay current benefits, and people whose private accounts lose money will ask the government for help again.
Mr. Smith said he is willing to gradually increase the retirement age, now 67 for someone born in 1960 or later, and willing to consider providing benefits based on non-wage income and increasing the cap on earned income subject to the payroll tax.
"I come from the business world, where if we have a problem, we figure it out," Mr. Smith said. "And Sen. Casey hasn't done that. Instead, he wants to ridicule me and make up stories that I want to cut Social Security for seniors and I do not and I will not allow that to happen."
Mr. Casey said there is no need to rush into "radical" solutions for Social Security because "I don't think there's a crisis."
"Let's take off the table the warmed-over proposals from 2005. It would be a terrible mistake to put Social Security dollars into the stock market, privatize," he said. "Social Security's been a very successful program for generations. There's no reason to radically alter it the way they want. Number two is, look at the last couple of years. The volatility (in the stock market) would have wiped out years of security for people."
Mr. Casey declined to say which proposals he favors for extending Social Security's life - raising the retirement age, lifting the income cap or something else. Congress has more urgent matters to deal with at the moment, he said. They include deciding on extending the Bush-era tax cuts and the automatic across-the-board spending cuts that will affect Social Security, Medicare and all other federal spending starting Jan. 1 unless Congress acts, he said.
"I'm certainly not prepared to sit down and lay out different proposals because we're not there yet," Mr. Casey said. "I know I haven't and I don't think most members of Congress have reached that point yet. Before any of those proposals are embraced by me, I'd want to sit down and talk directly with the people (experts) who understand the impact of that ... Look, I think there are plenty of people in Washington on both sides of the aisle that can sit down in Washington and work this out without going into that radical direction (Mr. Smith favors)."
On Medicare, Mr. Casey has aired a television commercial locally accusing Mr. Smith of wanting to "end Medicare." The commercial attempts to tie Mr. Smith to a plan put forth earlier this year by Republican Sen. Rand Paul of Kentucky to put Medicare recipients in the health care system available to Congress and its employees and cut Social Security benefits by 40 percent.
Mr. Smith has called Mr. Paul's plan "a good plan."
The Smith campaign said Mr. Smith meant only to praise Mr. Paul for having a plan and did not sign onto its specifics.
Mr. Smith calls the claim that he wants to "end Medicare" a "flat-out lie."
The campaign has fired back with a commercial that chastises Mr. Casey for voting to cut $716 billion from Medicare when he voted for President Barack Obama's health care reform law. In the commercial, Mr. Smith is seated next to his mother.
"After all, my own mother receives those benefits, and this son would never jeopardize that," he tells viewers.
Mr. Smith called Republican vice presidential nominee Paul Ryan's plan for Medicare "a starting point." Under Mr. Ryan's plan, Medicare beneficiaries would be allowed to opt out of traditional Medicare and buy private health insurance with Medicare funds. Mr. Ryan's plan also assumes a $716 billion Medicare cut.
While not specifically endorsing the Ryan plan, Mr. Smith said he also wants a system based on the competitive private market with federal money used to help senior citizens buy private health insurance.
"The private sector will run, with competition, more efficiently than any federal bureaucracy ever invented," Mr. Smith said. "In the free market system, if you don't feel you're getting the best deal possible, you can move to another supplier.
"Again, where is Sen. Bob Casey's plan? All he's done is run TV ads criticizing my plan."
Mr. Casey said the debate over health care reform gave Congress a "much better sense" of how to control Medicare's costs, which should not involve turning Medicare over to private insurers.
The reform law enables more preventive medical care and emphasizes reducing waste, fraud and abuse, which should eventually bring down costs, he said.
"We just barely opened the door on that the last couple of years," Mr. Casey said. "I guess I don't equate a series of good steps with a radical approach over here (in Mr. Smith's corner). I don't think they're equivalents."
The Congressional Budget Office has estimated the law will save $124 billion over 10 years.
Mr. Casey said "the basic effect" of privatization is to end Medicare and called Republicans' plan to privatize it "a false choice, that the only way you can save Medicare is to ... make it a voucher program."
"That's just preposterous," he said. "Look, a lot of this is about the guaranteed benefit. We've had a program in place that when you turn 65 you don't have to worry about your health care. You get it; it's available to you. You have time to worry about some other things - plenty of other things to worry about at that age. You can get the health care that you need."
Rayburn D. Smith, the Libertarian Party candidate for Senate, said he favors the federal government paying interest on the Social Security and Medicare trust fund cash to keep the programs solvent.
"The government should keep its hands off the trust funds," he said.
He opposes raising the retirement age or privatizing either program, but said he would favor increasing the cap on income subject to the Social Security payroll tax.
Contact the writer: bkrawczeniuk@timesshamrock.com