American Dreams (17 page)

What these longer working lives mean in practical terms is that we now have a record number of Social Security beneficiaries. And these beneficiaries, on average, are living another five to ten years longer than Social Security's earliest recipients.
11
This is good news, of course. I am blessed that my mother is still living and therefore a part of my children's lives. But it also presents us with a new dynamic we didn't have when the program was first designed.

In the past eighty years, Congress has increased the retirement age by two years, from sixty-five to sixty-seven. This is some progress in adjusting Social Security to the modern era, but not enough to ensure that the program will be there for your kids and my kids. We need to increase the retirement age for future retirees to account for the rise in life expectancy. If we act soon, we can do this without changing the retirement age for people who are currently over the age of fifty-five.

Another modernization to Social Security that should gather bipartisan support at a time when the growing divide between the rich and the poor is occupying so much political space is strengthening the program as a safety net for those at the bottom of the income scale. Americans who have worked their whole lives for low wages, like my parents, shouldn't be consigned to poverty in their old age. For these Americans, Social Security benefits are a substantial—in fact, irreplaceable—source of income in retirement.

Contrast this with high-income retirees. For wealthy retirees, monthly Social Security benefits are a less significant portion of their finances. The obvious answer is to adjust the benefits in the program to preserve and strengthen it for our children and grandchildren. Democrats resist this change on the grounds that turning Social Security into an income transfer program like traditional welfare will cause it to lose support among Americans. But this kind of ideological argument doesn't hold water. First, proposals by Democrats like Senator Elizabeth Warren to raise the amount of income subject to the payroll tax but keep benefits the same would do exactly that: turn Social Security into an income transfer payment by breaking the link between contributions and benefits. Second, it's hard to see how a program as popular as Social Security could fall out of favor with the American people by showing compassion for the less fortunate.

The demographics of Social Security have turned brutally against the program. Too few workers today support too many retirees. Increasing the benefit for all retirees would put unrealistic and unsustainable strain on the program. The answer is to reduce the growth of benefits for upper-income seniors while making the program even stronger for lower-income seniors. This wouldn't be a cut but simply a reduction in how fast the benefit will increase for wealthier retirees. Making this commonsense change will add years to Social Security's solvency. It is one of the best ways to save the program for high-income and low-income beneficiaries alike.

The third reform needed to avert a retirement crisis is also the most difficult: saving Medicare for all American seniors.

As with Social Security, my attachment to Medicare is deeply personal, even selfish. When my father got sick, Medicare paid for his many hospital stays. As he reached the end of his life, Medicare allowed him comfort and dignity by paying for his hospice care. My mother benefits from it to this day. Medicare, like Social Security, is absolutely essential to maintaining a secure, healthy and comfortable retirement for seniors. But Medicare, like Social Security, will cease to exist if we do nothing to reform it.

Again, this is not a scare tactic. It is simple math. In 2012 Medicare spending grew by 4.6 percent—to about $580 billion. Between now and 2022, this growth rate is expected to accelerate to around 7.4 percent per year.
12
At this rate, within eleven years the Medicare Trust Fund will run dry.

There was once a time when talking about Medicare reform was a third rail of American politics. But as we get closer to impending doom, it seems more people are at least willing to discuss serious ideas about how to save Medicare. I'm happy—even eager—to have that conversation. It needs to begin by taking a hard look at what recent reform efforts tell us about what works and what does not when it comes to making health care accessible to all Americans.

The Affordable Care Act—Obamacare—is about to turn five. The impending anniversary of the passage of this law raises the iconic question: Are you better off than you were five years ago? The answer for most Americans is an unequivocal no. Jobs have been lost. Hours have been cut. Employers have been forced to drop coverage. Premiums have skyrocketed. Millions have lost coverage they were happy with.

Obamacare has even hurt Medicare recipients by cutting about $156 billion out of Medicare Advantage. This cut was a grave miscalculation. Medicare Advantage is a shining success story that millions of seniors like my mom rely upon. In short, it allows you to receive coverage from a private provider using funding from Medicare. Its free-market structure has encouraged providers to compete for business by tacking on all sorts of value-added services for seniors. For example, one of the reasons my mom picked her current provider is because, in addition to good doctors, they pick her up and drive her to appointments.

This sort of competition in the marketplace invariably leads to two very good things: a decrease in prices and an increase in choices. Choice and competition are also at the heart of another Medicare success story: Medicare Part D. Through this market-based program, seniors have at least twenty-eight different prescription drug coverage plans to choose from, and competition has worked as a powerful cost control mechanism. The Congressional Budget Office found that total program costs are on track to be 45 percent less—or $348 billion—than initial ten-year projections. Average monthly premiums are expected to be $31 in 2014, less than half of the $64 originally predicted. Not only does Medicare Part D's design save money, seniors love it: 95 percent of seniors enrolled in Part D find it convenient for their needs.
13

There are important lessons in the mistakes of Obamacare and the successes of Medicare Advantage and Medicare Part D for ensuring the health and continued existence of Medicare itself. If history is any guide, the key is to avoid command-and-control rationing and instead dramatically expand health care choices for seniors. A marketplace of choices will spur competition and extend the solvency of the Medicare Trust Fund, all while making sure traditional Medicare remains an option. If we act now, we can save Medicare and provide health security to America's seniors.

The solution I support is a transition to a premium support system that would give seniors a generous but fixed amount of money with which to purchase health insurance. They could choose to buy from either Medicare or a private provider, and the choice would be theirs to make. My friend Paul Ryan is a leader when it comes to Medicare reform. During my campaign in 2010, I supported a couple of key proposals to fix the program that were detailed in his Roadmap for America's Future. Since then, he has teamed up with Oregon Democratic Senator Ron Wyden to propose a bold bipartisan plan to institute the premium support model.

The way this plan works in practice for American seniors is crucial. No one over the age of fifty-five would see a change in their benefits. For others, the government contribution they receive would be pegged to either traditional Medicare or the average bid from private providers—whichever is cheapest. This way, if seniors choose plans that cost more than that benchmark, they would have to pay the difference. If they choose cheaper plans, they would get to keep the savings. The level of support would increase with age, and poor seniors and those with the most health care needs would get more support.

The way this plan works to save Medicare is also crucial. Competition between private plans and traditional fee-for-service Medicare will create choices for seniors while controlling costs for taxpayers. Some providers will offer the same health benefits as traditional Medicare but for less money. Others will offer innovative benefits that are specifically focused around the needs of seniors. The CBO predicts that by 2030 Medicare spending under a premium support plan would be 7 percent less per person than under the current system.
14

As I mentioned, this reform will not be easy—worthwhile endeavors rarely are. But anyone who considers Medicare worth saving will give this plan a serious look. And any American who cares about the security of his or her retirement will demand leaders who do.

In a few months, I will turn forty-four years old. It seems like just a few days ago that I was graduating high school, or standing at the altar, or welcoming our first child home. The older I get, the more I am reminded of how quickly things move, and how it's never too early to start planning ahead for the next phase of life. As a citizen and a husband, this means saving for retirement. It means seeing what it will take to be ready when the time comes. It also means preparing for the fact that, if nothing changes, by the time I reach full retirement age at sixty-seven, Social Security and Medicare will have been insolvent for years.

I have an additional responsibility, though: the responsibility that belongs to all who are elected to serve. My responsibility—to the American people, to my parents, to myself—is to save these programs. But many of my colleagues in Washington—especially big-government liberals—don't seem to feel the same way. As a senator, then as a candidate and now as president, Barack Obama has never offered a serious proposal to fix Medicare and Social Security. The same goes for Hillary Clinton. Instead, they consistently have chosen to use any proposals to save these programs as political weapons against Republicans. As they do, it becomes increasingly clear that big-government liberals are more interested in winning elections than saving these programs.

It may help a politician defeat an opponent at the ballot box, but the ultimate price of inaction will be paid by future retirees. What many in politics seem to have forgotten is that we are here to serve the public interest, not posture politically. Yet so many politicians are unable—or unwilling—to acknowledge that their lack of action dooms the very programs they claim they are committed to preserving.

Partisan politics in America has always been contentious. But throughout our history, on issues of generational importance, our leaders have agreed to put aside politics for the sake of our people. If ever there was an issue worthy of this solidarity, it is preserving a secure retirement for twenty-first-century seniors. Should we fail to address it, history will point its finger at all who stood aside or stood in the way.

The next president of the United States will be unable to serve two full terms without confronting this looming crisis. The sooner we act, the less disruptive these reforms will be. In these pages I have presented an agenda for addressing this crisis head-on. I'm ready to take whatever political fallout it generates. But most important, I am eager to work with anyone—Republican or Democrat—who will work in good faith on these reforms.

 

I
ndia is a young woman with an American success story for our times. She rose from poverty and homelessness and beat the odds, not just because she overcame a lack of
things
in her life. No, she's special because she overcame a lack of
values
in her home—the values transmitted by strong families and stable communities. India's story is remarkable and inspirational. But it's also the exception that proves the rules about what it takes to achieve the American Dream.

Today India is a graduate of the University of Florida with a master's degree and a career as a school administrator. But she was born with the odds stacked against her. She grew up in public housing in Venice, Florida, the ninth of ten children to a mother struggling with alcohol and a father who was haphazardly in and out of their lives. She talks matter-of-factly about the abuse she suffered at home and the conditions in her neighborhood. Loud music blaring all night. Drugs sold openly on the corner. Alcohol everywhere—inside and outside her home. She recalls being beaten with extension cords until she was covered with welts. She was often reluctant to tell the police when her mother hit her because she had to be home to care for her mentally handicapped little sister. Still, the police were at India's home so often that by the time she was fifteen the cops knew her by name.

As bad as things were, India says, it was in eleventh grade when things “really started to fall apart.” It was Christmas Eve, and India had finished her shift at the Publix supermarket and returned home. When she knocked on the door to their apartment, her mother didn't answer.

“I was knocking on the door, knocking on the door. Tears rolling down my eyes,” she says. “I eventually realized around twelve o'clock in the morning that she was not letting me in. I was kicked out. I was homeless.”

This began a period in which India spent her days wandering the streets and staying with friends at night. Her goal, she says, was to do what she had to do to be able to go to school in the morning. School was her refuge from the chaos in her life. She didn't tell her teachers she was homeless, but still she managed to attend classes—and not just any classes, but difficult classes, such as precalculus and honors English. Somehow, despite the shambles of her life outside the school walls, inside them she found enrichment and stability, even excellence.

India challenges us to think about what matters in preparing children for happy, successful lives. I have always felt that I had a privileged childhood. Not because we had a lot of material things or knew a lot of important people—we didn't. But I was rich in the things that matter. I had a strong, stable home, a place where I was loved. I had parents and grandparents in my life who encouraged me to dream big, and who supported me as I pursued those dreams.

India had none of these things. There was no encouragement in her home to go to school and succeed—quite the opposite. Presented with India's report card full of A's, her mother typically responded by staring at her without emotion and then telling India to “clean my house.” Worse yet, there was none of the unconditional love a child needs to have confidence that she has a future and a purpose on the planet. India tells a heartbreaking story about one day when she was homeless, talking to the police about finding a place to stay. As they were talking, her father happened to ride by on a bicycle. She remembers telling the police officers eagerly, “That's my dad! He'll take me in. Ask him.” So the police told India's father that she needed a place to stay. He looked at her, then at the police officers, and said the words India has never forgotten: “She's not my daughter. Do what you want with her.” And then he left.

To hear India's childhood stories and to see the successful, confident woman she has become is to ask,
How?
How could a girl with so many strikes against her rise to achieve her dreams when so many others can't? Social scientists are in virtually unanimous agreement that, considering the odds, India shouldn't have succeeded in climbing out of poverty. Children like her—raised in poverty by single parents—get in more trouble with the law and perform more poorly in school than kids of two married parents. They are less likely to finish high school, let alone college, and are more apt to get pregnant young. In short, the children of single parents are more likely to be born poor and they are more likely to stay poor—four to five times more likely than children raised by married parents.
1

In truth, we've known for some time the disadvantages suffered by children in single-parent homes. What is less appreciated—but more relevant today than ever—is how the decline of the family has affected social and economic mobility in America. That is, how the rise of broken, single-parent families has affected the American Dream. Few people in Washington like to talk about it, but the decline of the family is a major factor limiting the ability of many Americans to get ahead. Elizabeth Sawhill of the left-leaning Brookings Institution reports that of the children born to low-income women, the children born to never married mothers are
three times
more likely to stay poor than children born to continuously married mothers.
2

A landmark study that looked exclusively at the ability of Americans to move up the economic ladder in different communities found that the strongest influence on upward mobility is family structure. More than racial segregation, more than education, more than inequality, the number of single parents in a community is most determinative of upward mobility. The study found that in a city like Salt Lake City, with low numbers of single parents, children in the poorest families have an 11 percent chance of making it to the top level of income. In a city like Atlanta, with high numbers of single parents, they have only a 4.4 percent chance of making it.
3

So why aren't all the politicians and reporters who claim to be concerned with the gap between the rich and the poor concentrating on the family? One reason is that the left spends a lot of time and resources creating government
substitutes
for the family. But if the state could simply step in and fill the role of two committed, caring parents, then India's story wouldn't be so special. The poor in America have plenty of government interventions in their lives. What they too often lack is something government simply cannot provide: a source of unconditional love that transmits the values of hard work, self-control and self-esteem. No one is born with these values, yet in order to find real success—truly rewarding and happy lives—people need them just as much as they need an education and a job.

India, too, has had plenty of government involvement in her life, from welfare to food stamps to government literally putting a roof over her head after her mother kicked her out. But the thing that made the difference—the reason we are able to celebrate her story today—is that she found a source of love and direction. Ask India why she was able to rise above homelessness, an abusive mother and an absent father, and she cites two things: her faith in God, and a mentor—a red-haired, blue-eyed woman who came to regard India, an African American, as her daughter.

When she was in seventh grade—still doing well in school but starting to act out and develop an angry, bad attitude—India met the woman who would change her life through a program called Take Stock in Children. The program targets poor middle school–aged kids and gets them thinking about their futures. It provides ninth graders with a scholarship for higher education, but, more important in India's case, it sets them up with a mentor. It was her mentor, Sharon, who gave India the love and guidance that more fortunate children get from their parents.

Sharon literally made a better future a possibility for India. She would drive her around Venice to a nice area of town, point to a big, expensive house and say, “India, someone owns that. You could do that one day. Couldn't you see yourself in a house like that?” No one in India's family had ever gone to college. Sharon was the first to introduce the possibility to India. “It was a completely foreign idea to me,” India says. “But she put hope in me. She never let me feel sorry for myself and she never let me feel like I was incompetent or I couldn't succeed.”

So India poured herself into school because she knew it would please her mentor. When the other kids at school teased her and accused her of acting “white” because she studied and read books by Laura Ingalls Wilder, India found the strength inside herself and from her mentor to ignore them. She found a peer group who shared her ambitions and she emulated them. And when India eventually went to the University of Florida on a full-ride scholarship from the Gates Foundation—she literally went overnight from a homeless shelter in Sarasota to a dorm room—it was her mentor's house she went to for Christmas and spring break.

“In spite of my failures, my downfalls and my weaknesses, she still loves me,” India says of Sharon. “She's shown me love even when I've made mistakes. She's shown me love.”

Through the grace of God and the generosity of people like Sharon, India is achieving her American Dream. I was a supporter of Take Stock in Children in the Florida legislature and I continue to support programs that help lift disadvantaged kids. But the void they are being asked to fill is huge, and growing. The problem of children being born without two married parents is no longer confined to an underclass of Americans. A significant portion of the American middle class is now teetering on the brink of the cultural chasm of single parenthood.

More important than the demographics of this problem is its moral urgency. We can no longer plead ignorance to the effects of single parenthood in the lives of children. Many single mothers are heroic in their efforts to provide for their children, and many succeed. But our responsibility is to prevent women and children from being forced to struggle alone in the first place—and we know what it takes to do that. It is now unacceptable—if it ever was otherwise—for a politician who claims to care about income inequality to ignore the plight of the American family. And it is unacceptable—and it was ever so—to attempt to shout down those who express concern about the family with charges of racism and sexism. The children of single parents start life disadvantaged and the overwhelming majority of them never catch up. They are the face of the decline of the American Dream.

One statistic rarely captures the dimensions of a major social, cultural and economic crisis as well as this one: the average age of an American woman's first marriage is now higher than the average age of her first birth. Unwed childbearing, in other words, is the new normal. Of the roughly 450 births that have occurred in America in the last hour, 180 of them were to unwed mothers.

Having children outside marriage has grown among all kinds of Americans, but it has not grown equally. For the most educated, the percentage of births to never married women is still small, just 6 percent, compared with 2 percent in 1982. For the least educated, the rate has grown to 54 percent from 33 percent. But the greatest increase has been among the moderately educated—high school graduates with some college education but no degree. Not coincidentally, these are the Americans who are struggling most in the new economy. For them, the percentage of children being born outside of marriage has climbed from 13 percent in 1982 to an astounding 44 percent today.
4

Brad Wilcox of the University of Virginia describes the group of mostly working-class Americans who are experiencing an explosion in out-of-wedlock births as being at a tipping point: Either they can continue to have more and more children out of wedlock and dim their prospects for success, or they can hang on to the institution of the family and begin to reverse the declines they've suffered.
5
Which direction they choose—and it is, still, a choice—will be a critical moment in the history of the American family. Single parenthood—with all its attendant poverty and chaos—tends to replicate itself through the generations. The daughters of single parents have higher rates of early pregnancy themselves, trapping their children in the same seemingly never-ending cycle of poverty that they themselves are caught in. Once lost to generational poverty, these Americans will be difficult to bring back. And the data are telling us that time is not on our side. Younger Americans are growing less and less attached to the institution of marriage. While the rate of unwed childbirth is around 40 percent for all women, for the members of the millennial generation, those now eighteen to thirty-three years old, 47 percent of births are outside marriage. Today, an astounding one third of our children live apart from their fathers. One in three.
6

It's not an exaggeration to say that the breakdown of the family is the single greatest challenge facing America. The question is, what can be done about it? As Ronald Reagan used to say, there are no easy answers, but there are simple ones. The first step is pretty basic and surprisingly controversial: just admitting we have a problem.