Dodging the big issues
At the risk of sounding like a broken record, we would again like to visit the subject of underfunded government pensions and health care benefits – as well as changes that need to be addressed in Medicare and Social Security.
Gov. Neil Abercrombie announced in his State of the State address that Hawaii’s unfunded liabilities for government employee pensions now stand at $20 billion. He warned that it could grow to $30 billion in the next decade if the problem is not addressed.
He budgeted $100 million this year for these liabilities, but pointed out that it would take $500 million per year for 30 years to fully fund them.
We wrote that it is not only time to address those liabilities but also change the promises we make to future state employees about pensions and benefits. No one – not government nor private industry – can afford traditional defined benefit plans. The state needs to shift to defined contribution plans, such as 401(k)s, for future employees.
Simply put, if one finds oneself in a hole, the answer is not to keep digging.
Similarly, we can’t keep existing eligibility ages for Medicare and Social Security. People are living longer and stretching these entitlement programs over decades simply will not work.
This was brought home again to us Tuesday when Prudential Insurance Co. ran a commercial predicting that the first human to live to be 150 years old will be born this year.
Medicare and Social Security need to be continuously adjusted so that eligibility ages keep pace with estimated life spans. Imagine, under current rules that 150-year-old will collect Medicare benefits for 85 years.
Our political leaders need to step up to the plate and address the big issues facing the state and the country. Right now, there are no bigger issues than runaway pension and health liabilities coupled with entitlement programs that will break if not fixed soon.
* Editorials reflect the opinion of the publisher.