Meet the Millennials

Courtesy of Doug Short.

In a country riddled with divisions, there is one which may come to dominate all of the others. Ironically, it is the schism most neglected by the chattering classes; one which receives scant attention from business pundits and political savants, right and left. It is the new generation gap. There is a growing wedge between the concerns of the electorate’s youngest members and the interests of its oldest. While there are many points upon which the two groups agree, there are a number on which their interests diverge. And, counted among these are solutions to the fiscal problems of the hallowed Social Security and Medicare programs.

We will hazard a guess and predict the Millennials — the generation of Americans born between 1981 and 1993 — will help the Democrats retain the White House in 2012. If current trends continue, these young voters will be one of the few demographic slices the Obama campaign can take for granted. True, disenchantment with politics as usual in Washington and apathy of youth may depress their turnout on Election Day; but the margin presently favoring President Obama over Mitt Romney (or Gingrich, or Perry, or Paul, or any other conceivable Republican contender) is twenty percent according to the latest survey by the Pew Research Center.

While the Obama campaign can count on the Millennials’s support, this backing will come at a price. No, this generation does not endorse doing away with Social Security and Medicare; support for both entitlements is high among Millennials. The difference is they are more likely to contemplate thorough overhauls to keep both programs going. In contrast, the 65 plus generation is the guardians of the status quo in this debate. No change is their starting point in any negotiations to salvage the two programs. Though exceptions may be made for more generous benefits.

Although 53 percent of Millennials favor maintaining current Social Security and Medicare benefits, 86 percent also favor allowing younger workers to put Social Security taxes into private accounts, and 74 percent are willing to allow future retirees to buy private health care insurance in lieu of participating in Medicare. As for the band aid fixes used repeatedly in the past to buy a few years grace, Millennials prefer to consider other options. Only 40 percent support gradually raising the Social Security retirement age; and just 35 percent approve of a similar fix for Medicare.

Curiously, these are Republican-type reforms endorsed by a segment of the electorate which overwhelmingly supports a Democratic incumbent President. Now, imagine if you will the morning after Election Day. President Obama remains in the White House but the Republicans control Capitol Hill. A fantasy? No. The arithmetic suggests this is the most likely scenario. If so, President Obama may be encouraged to tack to the center, leaving the extreme liberal wing of his party to fend for itself. There is recent precedent. Bill Clinton in his final four years in office worked with Republican majorities in the House and Senate. Perhaps we expect change after all.

Notes:

(Sources: US Census Department; Pew Research Center; and, AIFS Estimates.)

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