01/20/2013 10:48 am ET Updated Mar 22, 2013

The Road Forward: Social Security and Medicare

I recently received a letter from Philip, an AARP member in Fort Morgan, Colo., who wrote, "Social Security and Medicare are the foundation of most Americans' future. Rightly or wrongly, they are. We can make them secure, but it won't happen if we don't find ways to reach a bipartisan solution."

As we look ahead to the challenges facing President Obama and the Congress over the next four years, Philip has summed them up pretty well. He also reminds us that the debate that Washington characterizes in esoteric terms like "the debt ceiling," "sequestration," the "fiscal cliff" and "entitlements" is really about the day-to-day lives of real people and what kind of future is in store for them and their families.

That's why we need to broaden the current debate in Washington from the narrow lens of deficit reduction toward the larger goal of economic growth and maintaining the health and economic security of all Americans. There is no question that the nation needs to pay its bills and that reducing the federal deficit is a worthwhile goal. We need to address our nation's long-term fiscal problems. They affect all of us -- and, most importantly, our children and grandchildren.

Their futures will not be very bright if they are drowning in the red ink of budget deficits and a soaring national debt. However, their futures will not be very bright if they can't afford health care, or a quality education, or if they don't have the opportunity to attain long-term financial security. Leaving them with less economic security -- by weakening Social Security and Medicare -- would be just as bad, if not worse.

We must also tackle the high cost of health care. Rising costs have a negative impact on federal programs such as Medicare and Medicaid, as well as on the costs for state governments, employers and individuals. Moreover, we cannot sustain an ever-increasing share of the nation's output going to health care, especially when the Institute of Medicine estimates that as much as one third of health care spending is wasteful or inefficient.

Policy makers must not simply reduce the federal share of health costs by shifting costs from the federal government to other payers. That will not solve the problem. In fact, it will make it worse.

An example of this narrow approach is raising the Medicare eligibility age. This policy lowers federal health costs for the program by shifting costs from the federal government to employers, states and families on Medicare. This only drives seniors to more costly and less efficient providers, which, in turn, raises total health spending in the economy.

This is pure folly. A better approach would be to lower the growth in health care spending system-wide, which will also lower the cost of Medicare and Medicaid. We have to make health care work more efficient and less costly to keep it sustainable for generations to come.

A third issue we have to address is the low savings rate and the large gap between what individuals have saved and what they will need in retirement. The combination of high unemployment, low savings, decaying pensions, decreased home values and longer life expectancies means that too few people are accumulating enough to last through their lifetime.

As a result, Social Security is the critical foundation of income security for the overwhelming majority of people, and future retirees will rely on it even more. The recent debate over the fiscal cliff focused on people with incomes over $400,000 dollars a year, yet the typical senior has an income of only about $20,000 dollars a year. And for most of them, their Social Security benefit makes up a large chunk of that income.

So, while Social Security solvency is a major concern, we must also address adequacy. Of all the steps we can take to ensure that Social Security remains solvent and provides an adequate benefit now and in the future, the proposed use of the "chained CPI" is one of the worst, because it cuts the benefits of those who are least able to afford it: the oldest, poorest and most vulnerable among us. It would cut one full month's income from a 92-year-old beneficiary's annual Social Security benefits.

Over the last year, more than 6.3 million people 50-plus have given us their ideas on securing Social Security and Medicare for future generations as part of our "You've Earned a Say" initiative. They have considered a number of options, but two points are clear. First, they do not believe that Social Security should be cut to deal with problems in the rest of the budget. Second, they believe Social Security is important to their retirement security, and they are willing to increase contributions in order to maintain benefits.

That's why we must address the future of Social Security as a separate debate, with the goal of strengthening it to help people achieve a secure retirement, not to reduce the budget deficit it did not cause.

AARP is ready to have that discussion right now. Whenever Congress is ready to address the future of Social Security as part of a broader discussion on helping people achieve a secure retirement, we will engage in that debate. However, AARP is not willing to discuss the future of Social Security as part of a deficit reduction debate.

Moving forward, we need to make adjustments to Medicare and Social Security and Medicaid -- and AARP members realize that -- but we need to do so without compromising the health and retirement security of the American people or undermining the values that we all cherish.

Over the next four years, Congress and the president must work together and focus on our larger national goals of economic growth, jobs, health and financial security and enacting affordable policies to meet those goals. We look forward to working with our nation's leaders to achieve that goal.

This blog post is part of a series produced by The Huffington Post that closely examines the most pressing challenges facing President Obama in his second term. To read the companion article by HuffPost's Zach Carter and Michael McAuliff, click here. To read the companion blog post by Tara Sinclair of the George Washington University, click here. To read all the other posts in the series, click here.