To tackle entitlements, we need a sensible retirement age.

If life expectancy today were the same as in 1935, when Social Security was enacted, the baby boomers would be one depressed lot. Fortunately, people live longer now. But the retirement age of 65 -- a relic from the pension system of Bismarck's Germany -- remains unaltered. This anachronism will loom particularly large when the baby boomers approach retirement.

A diverse set of public and private groups agrees that entitlement spending -- particularly for Social Security and Medicare -- needs to be contained. Without adjustments, those programs will self-destruct or, more likely, exert a cataclysmic impact on the federal budget early in the next century, when the baby boom generation, a huge segment of the population, reaches retirement age. Yet any discussion of the problem is immediately short-circuited and labeled as an attempt to betray an important social contract with the elderly. This is silly. There is a simple way to ease the long-term strains that would have absolutely no impact on current or soon-to-be retirees: gradually raise the age at which both Social Security and Medicare benefits are payable to more fully reflect increases in life expectancy. Phasing in the higher age over roughly a 25-year period would prevent the current over-50 set from being affected in any way. Rather, the full impact would fall on the baby boomers, who currently are in their working prime and who have ample lead time to adjust to the change.

Social Security and Medicare outlays already have caused significant budgetary woes, even with the baby boomers still on the job. When the federal budget was near balance in the mid-1960s, spending on these two entitlements was 2.5% of gross domestic product. Now it is 7%. Since other federal outlays and total tax receipts have grown about proportionately with GDP over this period, Social Security and Medicare have essentially accounted for all of the current budget imbalance. And the problem is only going to get worse when the baby boomers start retiring around 2010. By 2030, Social Security and Medicare will absorb roughly 14% of GDP.

Clearly, any success in containing this potentially disastrous explosion of government outlays and associated budget deficits will require curbing the growth of Social Security and Medicare spending. And a simple, equitable first step is to raise elgibility age in tandem with increased life expectancy. Since Social Security came into being in 1935, the life expectancy of a 65 year old has risen by nearly five years and is projected to rise another two years by 2020. Current law edges up the eligibility age for full Social Security benefits a scant two years by 2020 -- without any increase in the Medicare eligibility age -- and is simply insufficient. Raising the eligibility age to, say, 70 by 2020 -- would eliminate roughly one-half of the projected imbalances in these programs. Economic output and tax revenues would also rise as some people worked a few more years.

We already index Social Security benefits to changes in the cost of living. Why not also index the retirement age to changes in life expectancy? In both cases, the idea is to preserve the original intent of programs for the elderly. This seemingly straightforward solution tiptoes through a political minefield. But, when presented with the fiscal facts and the reality of longer life expectancy, the American people would support this constructive proposal. Had the retirement age immediately been indexed to life expectancy in 1935 and then applied to Medicare in 1965, no one would have objected and these programs would not be on such a calamitous course.

The new age dawning with the 21st century must break away from an outdated definition of old age.

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