Congressional Ostriches
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It’s time to get our heads out of the sand when it comes to the federal budget. Already mandatory spending (Medicaid, Social Security, Medicare, etc) is 62% of the budget. Only the other 38%, which includes constitutionally-mandated functions like, oh, national defense, is discretionary.
If we stay on our current path, by 2045, a person paying 10% in taxes today will have a tax burden of 25%.
In today’s column by Rep. J. Randy Forbes (VA-04), he outlines the need for fundamental change in how we go about “balancing” the federal budget. Here’s a snippet:
Leadership in Washington has been avoiding the issue at a time when it is most vital that we begin to address it, despite warnings from the Federal Reserve chairman and trustees from the Medicare and Social Security programs. We have recently begun to see the first of 77 million baby boomers retire. As a result, entitlement spending is growing and adding significantly greater pressure on the federal budget. Congress has a responsibility to the American people to rein in entitlement spending, and our already delayed action should create even greater motivation to act now.
Will the leadership in Congress take action or will they continue to ignore the problem until it’s too late?
This is without a doubt the worst threat to our nation - and it’s coming on like a freight train (which is gathering speed thanks to the loss of treasure to the adventure in Iraq).
I assume that when you refer to the leadership in Congress that you are condemning both Republicans and Democrats for their concurrent failures here. It’s not like this problem is a recent incarnation…
Sadly, this quote is a good example of the kind of lip-service both parties are guilty of; but with the exception of the Clinton/ Gingrich years, no one actually wants to confront. Perhaps divided government is the best way to approach this problem as each party holds the other accountable - since the Dems took the Legislative Branch the total expenditure on earmarks has gone down.
I don’t think earmarks are the question here. Congress wants us to talk about earmarks going down because this distracts from the true monster–entitlement spending, as the post points out.
I don’t trust either party to tackle entitlement spending. Democrats won’t because this would mean hacking away at their base, and Republicans lack the balls. They are afraid the Democrats will accuse them once again of not feeding school kids and the like.
And to be fair to both parties, the public loves socking it to the rich so we can enslave the poor using entitlements.
What ever happened to Democrats talking about sacrifice and Republicans about self reliance?
Now both parties are afraid of a possible recession and the need for government to prevent a recession.
I learned in elementary school that you cannot appreciate the good times without experiencing bad times.
Grow up America. Recession, slow downs are part of life and capitalism. Pick yourself up, dust off and jump back on the horse, or get on the government stretcher named entitlements.
Which ever option you pick, pain is going to follow. Pick your poison. Me, I’ll pick the first one every time.
Congress will ignore it as long as possible then just turn on the printing presses and increase taxes. 97% of our representatives and senators are interested only in the next election and do not have the country’s interests at heart. As it stand now Medicare is out of money in 2019 and Soc Sec is out of money in 2041. Thank you FDR, LBJ, the Democratic Congresses that instituted these programs, Congresses of both parties that have kept them in place, and the American people who continue to elect representatives and senators who are bankrupting the country.
Ragnar,
It is not always about partisanship. There is certainly plenty enough to go around.
However, Democrats do have control of the House and Senate right now, so it might be nice if they offered some leadership on the situation. Especially since it is largely programs created during Democratic congresses and administrations that are the cause of our current run-away freight train.
Duck - Great post, I agree 100%
Jim - I agree as well, but my point is that we haven’t seen any leadership from the White House either. The fact is that which ever party does have the balls to make this an issue is going to get hurt. What needs to happen, is that the two parties need to place the nation first and party-politics second, and thus, accept the political reckoning on a more even-handed basis when they begin to make the tough decisions.
Will it happen? I doubt it, both parties place the achieving and maintaing of power, and the money that goes with both, far above service to the nation.
Bush tried to show some leadership with the proposal of allowing people to invest 2 of the 6 percent they pay in Soc Sec taxes into a personal investment account and we all know what happened with that.
Congress will just kick the can down the road in the next Congress by increasing the rate of taxation (say from 6.2% to 7-8% for Soc Sec and from 1.45% to 2% for Medicare) and the amount of income liable to said Soc Sec tax (currently $102,000) and then pat themselves on the back on what a great job they did.
Ted - agree that Bush opened up that proposal, but it was more window dressing than anything. To accomplish the goal he was proposing additional deficit spending (borrowing from China). I do agree though that your propose Congressional solution is the most likely.
If I can offer my own proposals, I would suggest the following off the top of my head:
1. Raise the age at which an individual becomes eligible for Social Security. People are living longer - and are thus able to work longer.
2. Increase the Social Security income tax for individuals above a specified income level.
3. End the Medicare “Advantage” plans which are costing the federal government 20-30% more per individual than traditional Medicare. Money we can ill afford to spend.
4. Mandatory government group competition for perscrpitions - this would include generics. If an indiivdual is on Medicare and wants the government to pay for their Rx, then they have to take whatever is determined to be most cost effective. Of course, if a citizen wants to pay for a name-brand with their own money, they are welcome to do so. (This is essentially the system for the military, and it works fine).
5. Do not pay illegal immigrants for any SS they may have earned. The fact is, that a) we can’t afford it, and b) those who have come here illegally were aware of the conditions of employment that they were working under. I agree it seems unequitable, but as of right now I don’t see any other solution.
J.R.,
I think your criticism of “entitlement programs” is warranted as long as Social Security payment expenses are subtracted from the figures. Social Security is a self funded program and should be held completely seperate from other government expenses. There seems to be at least some rational planning in Washington on keeping Social Security seperate and solvent.
Medicare on the other hand is something else. Benefits are increased without increasing revenue. Even without the increased benefits, Medicare suffered from the same problems as Medicaid and healthcare in general. It is my opinion that SOMETHING (I’m not sure what - I’m still open to suggestions) needs to be done about the larger healthcare mess. Medicare needs to be included in the solution to what is for our society the greater problem.
Ted,
After the savings built up from previous payroll (Social Security) tax surpluses is depleted, it is my understanding that, absent any changes, sufficient levels of revenue will exist to continue payments of about 70 cents on the dollar. President Bush’s plan to privatize Social Security would have depleted the surplus faster and resulted in less then 70 cents on the dollar in promised payments afterwards. President Bush’s plan was a first step towards destroying Social Security completely.