Romney has said that a block-grant system would give states more flexibility to innovate and more incentive to design efficient, fraud-free programs. “Let states care for their own people in the way they think best,” he said in a speech this month. Some states have welcomed the idea of reduced federal control. But critics say that Romney’s program couldn’t keep pace with the increased enrollment that comes as the result of demographic changes or recession and could result in slashed benefits.
When he was governor of Massachusetts, Romney was less enthusiastic about slashing Medicaid payments. As part of his health reform law there, he maxed out the state’s federal Medicaid match by expanding his program as much as the law allowed. The Massachusetts law also relied on additional Medicaid funds, granted as a waiver.
On Social Security, both candidates are rather vague, but they appear to be fairly close in their thinking. Unlike President George W. Bush, Romney has not endorsed a privatized approach to the pension program. Obama and Romney have said they would be open to raising the retirement age, which is already on a slow climb to 67. Both also say that richer beneficiaries should get less from the system, although they differ slightly in how they would accomplish that: Romney has said that wealthier seniors should get smaller benefits; Obama has indicated that he might like higher earners to pay more into the system. Neither has spelled out specifics.
Andrew Biggs, a resident scholar at the American Enterprise Institute who advised Bush on Social Security, said it’s not surprising that the candidates are avoiding concrete proposals. Unlike health care, which is complicated, Social Security has only a limited number of levers.
“A little bit of fuzziness is good for political purposes,” he said.
Entitlement reform, whether it involves Social Security or Medicare, poses political challenges for any candidate. On one hand, neither Obama nor Romney wants to appear cavalier about the prospect of entitlement programs consuming an ever-larger share of the federal budget, driving up deficits, and crowding out spending on other programs. On the other hand, specific plans can scare seniors and offer targets of opportunity for opponents.
Obama still hasn’t convinced many Americans that his health care law, which makes significant changes to Medicare and Medicaid, was necessary or prudent. Romney, by embracing Ryan’s plan for sweeping changes in Medicare and Medicaid, has left himself open to criticism that the government will shrink its support for seniors. Entitlement reform is likely to be an issue where each candidate will try to score points by accusing his rival of advocating a cure that is worse than the disease—particularly for older Americans.
“This is the highest turnout group that you have in American politics,” said Robert Blendon, a pollster and a professor at the Harvard School of Public Health who studies attitudes on health policy. “It will be a significant election issue.”