While all the talk is about the stimulus bill, the real bomb ticking in the federal budget is unconstrained growth in Medicare/Medicaid and Social Security. Recessions come and go, but untitlements are forever.
President Bush famously failed in his attempt to “spend political capital” after his 2004 re-election to reform these middle-class entitlements, but a powerful consortium of efforts combined to thwart him. President Obama has declined to touch these programs in his stimulus effort, but the issues remain on the table:
Social Security defenders were surprised… last week, when Obama named a leading voice for reining in entitlement spending, New Hampshire Sen. Judd Gregg, to his Cabinet.
But despite some grumbling in the ranks, the powerful, organized movement that effectively defended the Social Security status quo from Bush’s ambitious reform effort in 2005 has been one of the key dogs that haven’t yet barked at Obama.
The relative silence of liberal activists who smashed Bush’s hopes of slowing entitlement spending is a mark of the deep trust Obama enjoys from the left of his party — and it’s also giving hope to those who would like to see major shifts in the way Social Security and other programs are funded and managed.
Obama is “in a honeymoon phase, and many liberals are afraid to express concerns,” said Rep. Jim Cooper, a Tennessee Democrat and deficit hawk who sees the current economic crisis as an opportunity to reform entitlement spending.
Only Nixon could go to China. Still, if he’s serious about saving the federal budget from horizonless red ink – and the rest of us from a lifetime laboring for confiscatory taxation – the president ought to act quickly.
60 Minutes did a piece on this recently. Between SS and Medicaid the unfunded mandate by 2050 was something like 36 TRILLION dollars, which I would imagine even those in Washington consider a kinda big numba. I hate to get those nice little yearly social security updates showing how much I’ve put in and that in 12 years or so I will receive $1850 a month (in today’s dollars which is about $5599 in then years dollars!). We won’t see it, we can’t stop paying it, we can’t control how Congress spends it – sounds depressingly familiar. I fear for our children’s future.
There is talk of a BRAC style commission to deal with these issues.
Talk about a lack of political courage. I wonder what level of denial it takes to look at these numbers and, as intelligent, educated persons, continue to pretend they (our legislators) are not selling our country down the river.
You hear faint calls for “reform” but get the sense even those issuing them don’t take them seriously.
“Still, if he’s serious about saving the federal budget from horizonless red ink – and the rest of us from a lifetime laboring for confiscatory taxation – the president ought to act quickly.”
HAHAHAHAHAHAHAHA!
You slay me, sir!
Much of the growth in Social Security payments IMO (to retired, Medicare, Medicaid and SS Disability) is part and parcel of the corrupt corporate practices that involve eliminating contractually promised obligations to employees and instead dumping retired and disabled workers who were guaranteed medical, disability and other benefits into the governmental system.
Been there, living it.
It burns my butt that my Fortune 250 employer continues to get away with dumping obligations to employees and retirees, and they’re not the exception in this corrupt corporate shell game.
Until this gets stopped, everyone pays for these “entitlements” for former workers like me who through no fault of their own go onto “the dole” when sh– happens – you get hit by a truck, your employer decides to eliminate retirement benefits for current retirees – hey, suddenly you must be a slacker looking for an “entitlement” handout.
Go after the companies who are flagrantly getting away with ignoring even the current laws, and this portion of the government budget will drop by trillions. I’m not holding my breath waiting for anyone in the Congress to take this on, though. After twenty years of trying to push this string from the bottom up I’m not feeling that “change” is in the offing, no matter who is at the top of the food chain.
I brought this up a ways back here and (save for a few) was soundly trounced for my view. Our entitlements will surpass our ablility to fund them at the current rate by 2030. Hell, we had the Comptroller General of the United States quit his post over the inablility of the Government to listen to him, and take decisive action. I’d urge you all to take a look at the movie IOUSA. My “sky is falling” ravings of past posts here and elsewhere seem to be finding the light of day now.
All the talk about entitlements just makes me mad. I receive an “entitlement”-so do a lot of others on this list. I earned that entitlement and I am entitled to it. Because I earned it. Remember there are a lot of people who think of military retirement as an “entitlement”. Including people like Dr Chu and he is supposed to defend the military from that kind of talk.
Same goes with SS and Tricare. I earned those benefits and the government better deliver. I paid in for over 30 years.
Simply put-we have to find ways to increase revenues and also have to come to grips with the fact that maybe, just maybe, the country is spending its money on the wrong things. As JAS points out-businesses bear a big responsibility too. For being allowed to walk away from their corporate responsibilities.
Go after the money! Its there.
None of you have thought this through.
Because there is a way to solve the problem. An ugly way, but a way.
Death.
The Left will create this crisis, ride it until it breaks the economy…then call for euthanasia as a budget-balancing measure.
And if you don’t think political reliability will be a factor in who dies first, I’ve got some oceanfront property in Arizona to sell you.
That was your money they’ve been promising you Skip. After the pass-through tax to support the bureaucracy that hands it back to you. The whole thing was one big Ponzi scheme, with the trailing edge of the boomers set to either break the system or the government to break their promises.
I simply don’t believe we’ll be able to tax ourselves into prosperity.
Good thing Social Security wasn’t privatized – as Bush wanted a few years ago – or the program would be in much deeper difficulties today…. and impact a lot of seniors and those on disability.
Raiding the Social Security treasure chest for other programs hasn’t helped either. But Social Security, despite the forecast of large increase in payment to Baby Boomers in years future is still a very manageable problem. Economist Krugman tells us that to extend the benefits into the 22nd century would only “require additional revenues of only .54 per cent of GDP… and only 3 percent of total GDP.”
The Bush appointed trustees tell us this in their 2008 Social Security Report numbers that are a little higher, but still very manageable:
Unfortunately Medicare is much more problematic than Social Security.
But debating future transfer payments ignores the immediate and massive, clear and present financial crisis that now threatens to have deep and long lasting social and economic repercussions and many unexpected consequences for our way of life.
Recessions, despite their pain may indeed “come and go. ” But not so with Depressions! Deep and long lasting, they produce profound pain and long lasting change. Ask anyone who lived in the thirties.
Was it my money? I think not. Only in the fact that I paid through for the privilege of collecting later. I might be inclined to agree with you-IF the disparity between rich incomes and average people was a linear line. But its not. There was a graph published some time ago that pointed out that for most of us (98%) incomes were fairly static. However the growth for that last 2% was positively obscene.
The simple truth is that the average person cannot live off social security these days. But then they were never supposed to. Because it was meant to complement fixed pensions schemes from companies-that have now been replaced by another kind of Ponzi scheme: 401k’s that were always supposed to go up in value. Except they have not. And in the case of many types of retirement schemes that are left-the laws and inflation have conspired to rob you of it. So instead of having to work less-we have to work longer. And longer. And longer. Many folks don’t even get an access to a pension because companies have been able to walk away from having to pay one.
Tell you what-I’ll skip Social Security, to trade it in for guaranteed health care for all. So that moving between jobs and the ebbs and flows of the economy would be less of the disaster that it is for most Americans now.
Other countries have made a decent standard of living work for their populations. They have decent health care, transportation that works, safe streets. The difference is that they don’t live in huge houses and or have huge yards-but they have housing that is decent and clean. As a result the majority lives better for that.
Think what we could do for both health care and Social Security with money we are wasting on worthless Arabs…………
Take that 1 trillion or so and imagine what we could do if we spent it on ourselves.
Screwed.
Us, but especially our kids.
And the future of our country.