Tuesday, June 16th, 2009

With millions of baby boomers beginning to leave the work force, the cost of these popular benefit programs threatens to swamp the government in debt in the coming years if nothing is done.

One proposal gaining steam is a creating bipartisan commission to tackle the approaching insolvency of the government’s three big “entitlement” programs: Social Security, Medicare and Medicaid.

Everything would be on the table, including tax increases and benefit cuts. The commission would produce a “grand bargain” package of recommendations that Congress could accept or reject in total.

President Barack Obama has said that action to overhaul Social Security and other guaranteed-benefit programs is critical. But top aides are cool to the commission idea for now, wanting Congress to deal first with the president’s ambitious health care and global warming initiatives.

“The fact that the leadership has been opposed to it has been a problem,” said Rep. Frank Wolf, R-Va., one of two original authors of the commission bill in the House. Still, Wolf said in an interview, “There’s an economic tsunami off the coast and it’s ready to wipe us out.”

In a letter Friday to Obama, Wolf raised the prospect that the nation’s coveted triple-A bond rating, which it has held since 1917, may be jeopardized if Congress doesn’t act soon on shoring up Social Security, Medicare and Medicaid.

The threat of a downgrade could signal similar problems for other big economies — particularly the United States, whose finances has been hit just as hard. The White House said it did not expect the U.S. government’s credit rating to be cut.

Wolf joined with Rep. Jim Cooper, D-Tenn., a member of the fiscally conservative Blue Dog Coalition, which has long pushed for a Social Security overhaul. A similar bill is being pushed in the Senate by Sens. Kent Conrad, D-N.D., and Judd Gregg, R-N.H., the chairman and senior Republican on the Senate Budget Committee.

“We cannot allow this issue to be kicked down the road any further,” said Conrad.

A similar proposal is being pushed by Sens. Joseph Lieberman, the Connecticut independent, and Sen. George Voinovich, R-Ohio.

The bills would create a panel to examine the country’s fiscal crisis and come up with a plan to bring revenues and expenditures into balance for Social Security, Medicare and Medicaid. Spending on these three programs now totals more than $1 trillion a year, almost one-third of the entire federal budget.

Neither raising payroll taxes on current workers nor cutting benefits for the nation’s elderly has much appeal to politicians.

“What’s missing here is not ideas, it is political will,” said House Majority Leader Steny Hoyer, D-Md., one of a growing number of lawmakers hopping aboard the commission idea. He suggests Congress could begin debating the commission legislation later this year.