Business group will campaign for a full retirement age of 70
WASHINGTON — An influential group of CEOs is pushing a plan to gradually increase the full retirement age to 70 for Social Security and Medicare and to partially privatize the health insurance program for older Americans.
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 also be smaller.
Medicare recipients would be able to enroll in the traditional program or in private plans that could adjust premiums based on age and health status.
‘‘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 America’s new fiscal and demographic realities,’’ said Gary Loveman, chief executive of the casino giant Caesars Entertainment Corp. He chairs the Business Roundtable’s health and retirement committee.
The Business Roundtable is an association of CEOs of some of the largest US companies. Member companies account for nearly a third of the total value of the US 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 so-called 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 proposal to offer private plans as part of Medicare is similar to a proposal by Republican Mitt Romney when he ran for president last year. Obama and Democrats in Congress campaigned against it.
‘‘These ideas were soundly rejected in the last election only a few months ago,’’ said Max Richtman, CEO of the National Committee to Preserve Social Security and Medicare.
The CEOs’ plan puts them at odds with many groups.
In a speech this week, A. Barry Rand, AARP’s chief executive, denounced proposals to increase the eligibility age for Medicare, saying it would shift costs to employers, states, and individuals. ‘‘This is pure folly and very dangerous,’’ he said.
Retirees can now get reduced Social Security benefits starting at 62. They must wait until 66 to get full benefits, a threshold that is gradually rising to 67. The eligibility age for Medicare is 65.
The business group’s plan would make unspecified accommodations for people with physically demanding jobs.
Social Security and Medicare both face long-term financial problems as aging baby boomers reach retirement, leaving relatively fewer workers to fund the massive benefit programs. Among the CEOs’ ideas:
► Adopt a new government inflation measure that would result in smaller annual increases in Social Security benefits.
► Make initial Social Security benefits more progressive by guaranteeing low-wage workers enough benefits to stay out of poverty, while lowering initial benefits for retirees with higher incomes.
► Require newly hired state and local workers to join Social Security. Some state and local agencies don’t participate.
► Expand means testing for Medicare benefits so that wealthier recipients must pay more for services.