For Social Security, the association—made up of CEOs from leading U.S. companies—recommended these steps to ensure the solvency of the program for the next 75 years:
- Exempt from the reforms anyone who is currently 55 or older to protect retirees and those approaching retirement;
- Gradually raise the Social Security retirement age from 67 to 70;
- Change benefit formulas to increase progressivity;
- Update the method for calculating cost of living adjustments (COLAs) by applying the more accurate Chained Consumer Price Index;
- Include newly hired state and local workers in the Social Security system; and
- Encourage more private savings.
For Medicare, BRT’s plan suggests:
- Gradually raising the Medicare eligibility age to 70 but protecting current benefits for those approaching retirement by exempting anyone who is currently 55 or older;
- Expanding competitive models of care by offering seniors competing and comprehensive private plans in addition to traditional Medicare;
- Reducing taxpayer costs for upper-income beneficiaries by considering means testing for Medicare; and
- Protect the safety net for low-income Americans.
BRT found significant inefficiencies in its review of the federal entitlement programs and determined that demographic changes have rendered the system unsustainable in its current form. Medicare, Medicaid and Social Security currently account for 42% of the federal budget; by 2020, they are projected to take up 50%.
“We believe very strongly that our modernization recommendations must be included in any budget deal that’s agreed to by the President and Congress,” said Randall L. Stephenson, chairman and CEO of AT&T Inc., and vice chair of BRT’s Health and Retirement Committee. “There is a sense of urgency around this. We’ve said all along that Congress and the administration are going to have to take some very real and meaningful steps to reform entitlements if we’re going to rein in federal spending.”