The distributional aspects are what are interesting. Cost cutting measures are an implicit subsidy to families without elderly members or to families with large numbers of working children. If the family either picks up the slack when benefits or cut - or can expect a smaller inheritance - it in effect pays for any benefit cuts. To put it another way, individuals whose parents have already passed and who are not retired receive an undeserved benefit when benefits are cut in preference to increases in the payroll tax. When Bill Clinton took office, U.S. News published a budget balancing exercise. I calculated that to forestall cuts, taxes would have to be raised by 1.05% of income for both employers and employees to avoid cuts - increasing taxes from 2.9% from both sources to 5%. Given the increase due to Part D, I am sure that figure is now higher.