While the health care reform debate continues to devolve into one long, loud argument over entitlements, the fact remains that a fiscal reckoning is coming.
Blame the Democrats. Blame the Republicans. Blame George W. Bush. Blame Barack Obama. And while you’re at it, take a look in the mirror and blame yourself if you are, like me, a Baby Boomer.
There’s plenty of blame to go around.
Fiscal nightmare
Over the next decade, the Obama administration proposes some $45.8 trillion of spending with some $20 trillion of that to be spent on Social Security (retirement pensions), Medicare (health care for the poor, the blind, disabled and children), and Medicare (health care for seniors citizens).
The trouble with that plan is that the government only anticipates revenues of some $37.3 trillion. That leaves a projected deficit over the next decade of $8.5 trillion.
Over the next decade, demand for government services among Boomers is increasing. According to the Census Bureau, the number of people ages 65 and older in the U.S. is expected to more than double by 2050, rising from 39 million today to 89 million.
The problem with the Democratic health care reforms is that the don’t do nearly enough to address the fundamental imbalance between spending and tax revenue and the growing deficits that imbalance will create. Likewise, the Republicans did precious little different when they were in power and the health care reforms that the GOP has offered over the last year have been too vague and too mired in the health care status quo.
The solution? Frankly, there’s no quick or easy fix. There are really only two marginally effective strategies — substantial cuts in Social Security, Medicare or Medicaid spending or even more substantial tax increases.
The Heritage Foundation glumly reported in 2008 that “the total cost of these entitlement programs will increase from 8.4 percent of GDP to 18.6 percent of gross domestic product by 2050. In comparison, the entire federal budget is 20 percent of GDP. To cover these additional costs, Congress would need to raise taxes permanently by the equivalent of $12,072 per household or eliminate every other federal program.”
Demand growing
As the Baby Boomers lumber toward retirement and the times in their lives when their health fails, I don’t hear many in my generation talking about taking one for the team in terms of giving up future Social Security or Medicare benefits
At present, the federal government subsidizes citizens at retirement age by about $25,000 a year in Social Security and Medicare benefits. As the oldest of the Baby Boomers begin to hit 65 in 2011, that growing subsidy becomes unsustainable.
The greatest problem with the proposed health care reforms is that the proposed reforms only begin to nibble around the edges of the core problem while creating yet another runaway locomotive of an entitlement program. Those reforms, sadly, don’t come without a very real fiscal reckoning for us, our children, and their children.
Contact Perspective Editor Sid Salter at (601) 961-7084 or e-mail ssalter@clarionledger.com. Visit his blog at clarionledger.com. His talk radio show, On Deadline with Sid Salter, is broadcast on the SuperTalk Mississippi network.
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