The Democratic and Republican nominees for president have yet to be decided, but that hasn’t stopped voters from playing out various victory and doomsday scenarios in their heads. And while millions of Americans are vigorously debating which candidate will, say, “make America great again” or send us off a cliff, few are discussing a growing crisis that threatens to affect everyone: federal entitlements.
A few weeks back, when President Barack Obama submitted his $4 trillion 2017 budget, he took the opportunity to pat himself on the back for lower deficits and improved employment numbers, while also talking up plans to boost cybersecurity, clean energy and early childhood education. What was missing from his comments, however, was a little perspective.
As Robert J. Samuelson wrote recently in the Washington Post, the president’s words — and the American people — could have benefited from a little more “candor and context.”
“We now have a government that’s doing less and costing more,” Mr. Samuelson wrote. “By doing less, I mean that many traditional government programs — from defense to federal courts — are being slowly and systematically strangled by the costs of an older population (higher Social Security) and the related health care spending (higher Medicare and Medicaid).”
Social Security, Medicare and Medicaid already consume about half of our federal budget. Roll in interest on the national debt and other so-called “mandatory” federal programs, and more than two-thirds of the federal budget is accounted for — about $2.5 trillion per year. And that price tag is going nowhere but up in the years and decades ahead.
This can’t continue, and candor is going to be needed very soon, before this whole budgeting system implodes. How bad could it get? Just look at the numbers:
As Mr. Samuelson lays out, from 2017 to 2026, Social Security spending will rise by 27 percent, Medicare will go up by 30 percent and Medicaid will increase by 24 percent. At the same time, defense spending will drop by 19 percent, and nondefense discretionary spending — which includes the courts, regulatory agencies, the national parks and much more — will drop by 16 percent.
While Mr. Samuelson says that there will be some discretionary programs (such as cybersecurity) that will always, whether for political or legitimate reasons, grow more rapidly than inflation and population, they are the exceptions. Our current policy is for most discretionary programs to do more with less, which is a formula for failure. He notes that while the squeeze in any one year can be modest, the cumulative effect is fatal.
Any remaining presidential candidate who isn’t approaching this oncoming freight train of a problem with the candor and rationality it deserves is a wholly unserious candidate. The same goes for anybody in Congress. With our $19 trillion federal debt, and Social Security and Medicare facing unfunded liabilities of $60 trillion, it’s time to get busy with serious entitlement reform — a steady increase in the retirement age for Americans under 50 would be an excellent place to start.
This can’t be put off any longer. The longer Washington waits to reform the programs, the greater the likelihood that current beneficiaries will face cuts. The cliched saying is completely accurate: Something that can’t go on forever, won’t.