2012 - Gingrich: Social Security & Medicare Plan

Gingrich Offers Bold Plan to Strengthen Social Security and Medicare; Romney Provides No Plan

source: http://www.newt.org/news/gingrich-offers-bold-plan-strengthen-social-security-and-medicare-romney-provides-no-plan

Newt Gingrich is the Only Candidate Who Has Led Entitlement Reform on a National Level

Americans work their entire lives to pay for their hard-earned retirement benefits, and as Americans now enjoy longer and healthier lives than ever, these benefits must be protected and made even stronger.
Newt Gingrich rejects the idea that we can solve our budget and debt crisis by some combination of cutting benefits and raising taxes within the current framework of these two programs.
     Instead, we need to think outside the box with fundamental, structural reforms that would transform and modernize these two programs, changing how they work to achieve their goals.
     Newt Gingrich is the only candidate who has led entitlement reform on a national level. His landmark 1996 welfare reform legislation introduced work requirements, lowered the welfare rolls by two-thirds, and helped bring millions out of poverty.
     The Gingrich plan will address the redundancies and inefficiencies in our other federal means-tested programs, and seek reforms based on the lessons and success of the 1996 reforms.
By modernizing our old fashioned, redistributive entitlement programs to tap the power of markets and local innovation, we can achieve all of the social goals of these entitlement programs far more effectively, serving seniors and the poor far better, at just a fraction of the current cost.
     The Romney Plan provides little information on how the candidate plans to secure Social Security, bring Medicare into the 21st century, or enact badly-needed reforms for the dozens of other federal welfare programs; it does, however, support returning the payroll tax on employees from 4.2% to 6.2% in the middle of a recession.

Issue	Gingrich	Romney	Verdict: Gingrich Plan Better
Saving and Strengthening Social Security	Choice between the traditional benefits system and the opportunity to invest in personal savings accounts	Unclear	Under the Gingrich Plan, any American who wants to enjoy the existing Social Security system will be able to do so.  Gingrich also supports creating the option for personal savings investment and insurance accounts, where current workers have the choice to save or invest a portion of their earnings and enjoy the returns in retirement – which historically would be much higher than the benefits paid under traditional Social Security.
Retirement Age	Do not raise the retirement age	Potentially raise the retirement age	Gingrich believes there is no need to raise the current retirement age. Workers with personal accounts choose their own retirement age, with market incentives to delay it as long as possible. Romney considers the prospect of raising the retirement age in his economic plan: “there are a number of options that can be pursued to keep the system solvent—from raising the eligibility age to changing the way benefits are indexed to inflation for high-income retirees.”
Payroll Tax	Maintain current rate of 4.2% on employees until the economy recovers, with the ultimate goal of eliminating the tax	Return payroll tax on employees to 6.2%	Gingrich supports a personal savings account that would eventually be expanded to finance all of the benefits now financed by the payroll tax, allowing that tax ultimately to be phased out altogether.  Presently, he supports keeping the payroll tax on employees at 4.2% while the economy is still weak. Romney supports returning the payroll tax on employees to 6.2%.
Improving Access, Care and Options for America’s Seniors	Choice between the traditional system or opportunity to purchase private insurance with premium support	Unclear	Under the Gingrich Plan, any American who wants to enjoy the existing Medicare system will be able to do so. Americans can also opt to transition to a more personalized system in the private sector with greater options for better care, where they would receive premium support to purchase private insurance.
Means-testing Medicare and Social Security	No	Unclear	The Gingrich plan rejects the notion that cutting benefits is the only way to preserve Medicare and Social Security, and will not support means testing that will pare back Americans’ hard earned benefits.
Making Medicaid More Effective and Efficient	Block grant Medicaid to the states	Block grant Medicaid to the states	Newt Gingrich is the only candidate who has led on a federal level, and this includes the only successful entitlement reform in history. The Gingrich Plan will build on the success of his 1996 welfare reforms, which block granted welfare funds to the states, and devolve decision-making powers to the states. A Medicare block grant system will free states to innovate and create Medicaid programs best suited for them.
Other Means-Tested Entitlements	Build on 1996 welfare reform and block grant to states	Unclear	The Gingrich plan will first seek to streamline these plans to eliminate redundancies, then it will block grant all of these programs to the states, which could save up to $3.25 trillion for the federal government and $1.4 trillion for the states. Under a block grant program, each state can focus on designing assistance programs to low-income families that are best tailored to local needs.

Click here for a side-by-side comparison of Gingrich and Romney's tax plans.
Click here for a side-by-side comparison of Gingrich and Romney's manufacturing plans.
Click here for a side-by-side comparions of Gingrich and Romney's reforms for the Federal Reserve.

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