Loveman-led panel of biz leaders suggests sweeping changes
An association of influential chief executive officers, which includes Caesars Entertainment Corp. Chairman and CEO Gary Loveman, suggested several changes Wednesday to Social Security and Medicare that would protect both programs.
Loveman, chairman for the Washington, D.C.-based Business Roundtable’s health and retirement committee, outlined the recommendations during a news conference at the organization’s offices. He also outlined the plan in a Wall Street Journal opinion article.
The suggested changes to Social Security include gradually raising the retirement age from 67 to 70, changing benefit formulas to increase progressivity, updating the method for calculating cost of living adjustments and including newly hired state and local workers in the system.
The Business Roundtable’s plan would protect those 55 and older from cuts, but younger workers would face significant changes. The plan unveiled Wednesday would result in smaller annual benefit increases for all Social Security recipients. Initial benefits for wealthy retirees would be smaller.
On Medicare, the roundtable wants to raise eligibility to age 70, offer seniors more competitive and private plans, reduce taxpayer cost for upper-income beneficiaries and protect the safety net for low-income Americans.
Loveman, with AT&T Inc. CEO Randall Stephenson, the committee’s vice chairman, said the proposals were “good solutions,” but they were unsure on how the suggestions would be received on Capitol Hill.
“These are pragmatic changes that sustain the security, reduce the rate of growth and rationalize some of these programs,” said Loveman, whose company operates more than 50 casinos nationwide, including 10 resorts on or near the Strip.
The proposal comes as Republican leaders in Congress are calling for spending cuts as part of an agreement to increase the government’s authority to borrow. Treasury Secretary Timothy Geithner has said the United States will exhaust its borrowing authority as soon as mid-February.
President Barack Obama has said he is willing to negotiate deficit reduction with GOP leaders but insists that those talks be separate from decisions to raise the $16.4 trillion debt ceiling.
Obama has warned that if Congress does not raise the debt ceiling, the economy could crash and Social Security checks and veterans’ benefits would be delayed.
Loveman said representatives of the association, which includes CEOs of companies with more than $7.3 trillion in annual revenues and nearly 16 million employees, hope to meet with the White House and lawmakers to discuss the ideas.
“It’s hard to gauge what the response will be,” Loveman said.
Loveman said the proposed changes could save Medicare more than $6 trillion over the next 25 years, and Social Security could declare itself solvent for the next 75 years.
Loveman and Stephenson said the idea of privatizing both programs was not discussed by the CEOs.
“America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses new fiscal and demographic realities,” Loveman said.
The roundtable also suggested employees save more toward retirement.
Loveman said Caesars, which has 60,000 full-time employees companywide and more than 21,000 workers in Nevada, encourages its staff to join its 401(k) retirement program, in which the company matches a percentage of contributions.
“It’s hard to get employees to make that decision,” Loveman said. “We encourage them to make that decision.”
The Business Roundtable is an association of CEOs of some of the largest U.S. companies. Member companies account for nearly a third of the total value of the U.S. stock market, according to the group.
The group has been an ally of Obama in the past, endorsing his proposal to raise taxes on high earners during negotiations over the “fiscal cliff” in December.
Obama has embraced some parts of the business group’s plan for Social Security and Medicare, but he opposes any plan to privatize Medicare and has backed away from his earlier support for raising the eligibility age.
The Associated Press contributed to this report. Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.
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