Getting the U.S. health finance and retirement systems in order will be important to any efforts to overhaul the economy, according to President Obama.
“To preserve our long-term fiscal health, we must … address the growing costs in Medicare and Social Security,” Obama said tonight during a speech delivered at a joint session of Congress. “Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security.”
Obama identified health care, education and energy as three areas in which the United States must invest even as it is struggling to tame the budget deficit.
Congress already has passed a bill that will expand the State Children’s Health Insurance Program and a second bill, H.R. 1, that includes a provision that will pay 65% of the health benefits continuation costs for many laid-off workers, Obama said.
“Businesses and workers, doctors and health care providers, Democrats and Republicans” will come together next week to begin work on developing broader health care system reforms, Obama said.
“Health care reform cannot wait, it must not wait, and it will not wait another year,” Obama said.
While describing possible strategies for cutting the budget deficit, Obama also referred briefly to Medicare.
“We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier,” Obama said.
When the country is working on Social Security reform, one strategy should be setting up a system of “universal savings accounts,” Obama said.
Rahm Emanuel, Obama’s chief of staff and a former Democratic representative from Illinois, has been a champion of one version of the USA concept
Emanuel proposed in a 2007 op-ed that the USA could be a supplement to Social Security, with employers and employees each contributing 1% of an employee’s paycheck to the USAs on a tax-deductible basis.
To keep the management fees for small USAs low, USA holders would invest in a menu of privately run funds selected by a board that would be similar to the board that chooses investment options for participants in the federal employees’ Thrift Savings Plan, Emanuel said.
Chris Edwards, fiscal policy director at the Cato Institute, Washington, has proposed a different kind of USA that would be an all-purpose substitute for the Roth individual retirement account, with a $10,000 annual contribution limit and rules that would make all distributions free of penalties and taxes after 3 years.
In 1999, President Clinton proposed a USA provision that would have provided a $300 annual refundable USA tax credit for singles taxpayers with annual incomes under $50,000 and couples with annual incomes under $100,000. Clinton wanted the federal government to match some USA contributions.