Reich: Let’s be clear about the long-term deficit problem.

It’s not Social Security. Social Security’s shortfall is modest. It arises because so much income has gone to top earners in recent years that the payroll tax covers a smaller percentage of overall income than was planned for. I should know. I used to be a trustee of the Social Security trust fund.

The obvious answer is to lift the cap on income subject to Social Security payroll taxes, now $106,800, to about $150,000.

Nor is the real problem Medicare. It’s what lies behind Medicare’s projected growth: the explosive growth in medical costs...

The answer is to finish the job of reforming health care. How? Let Medicare use its bargaining leverage to get low-cost drugs and supplies. End health insurer’s immunity from antitrust laws. Allow the public to buy health insurance from a Medicare-like public option. And award plans that focus on disease prevention rather than expensive diagnostics and procedures.
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