Higher taxes may not be enough to save Medicare, with program cutbacks needed to bring down rising costs, Doug Holtz-Eakin, President of the American Action Forum, tells Yahoo! Finance Live.The growing cost of Medicare and other social services is rising at a pace that’s outstripping even ambitious tax programs, with rates of up to 7 percent per year, says Holtz-Eakin. He adds that such large mandatory spending programs are growing at rates that exceed nearly every other source of income. “We’re not gonna have a revenue source that grows that fast,” says Holtz-Eakin.Even more aggressive tax plans may not be enough to make up for that shortfall, leading to a perpetual deficit. “You can’t tax your way out of this,” says Holtz-Eakin. “You can’t just promise economic growth and have it solve itself.”The solution may come not just from reducing the scope of such programs, but by slowing the growth of the programs. Holtz-Eakin says systems like Medicare were never set up to be financially self-sustaining. “That program needs to be put on a more sound financial footing to survive in the future,” he says.President Biden recently published an op-ed in The New York Times outlining his plan to continue Medicare for Americans, a plan that has come under criticism for its sprawl and ballooning budget.Above, Yahoo! Finance’s Julie Hyman and Jared Blikre spoke to Holtz-Eakin. Video Highlights:0:37 – Revenue source commentary0:50 – Sustainability and taxpayer financing of Medicare
