Rep. Paul Ryan (R-WI, and my Congressman) wrote the following for the Minneapolis Star-Tribune today regarding the entitlement crisis:
It has become a yearly drill: The Medicare and Social Security trustees sound a clear warning that, without reform, both of these programs will go bankrupt in the not-so-distant future. It has also become a yearly drill for those in Washington to respond to the alarm by hitting the snooze button.
This year’s trustees’ report makes clear the growing urgency of this problem — especially with the effects of the recession — and the severity of the repercussions should this avoidance habit continue.
Highlights of the report include:
SOCIAL SECURITY
- In just seven years, Social Security’s benefit obligation will exceed its cash income from tax revenues, thus other programs will begin to be tapped for resources.
- By 2037, the Social Security trust funds will be exhausted. As a result, future retirees will face an immediate across-the-board benefit cut of up to 24 percent.
- Over the next 75 years, the trust funds have an unfunded liability of $5.3 trillion.
MEDICARE
- This program, which finances health care for retirees, is also headed for bankruptcy, but at greater speed and with more severe consequences.
- According to the trustees, the entire program’s unfunded obligations have risen to $37.8 trillion.
- The Medicare Hospital Insurance Trust Fund, which is financed by a dedicated payroll tax, will this year begin running a cash deficit; by 2017, it will be bankrupt.
To his credit, President Obama has acknowledged the need to address these problems. But his budget actually makes the problem worse by expanding the already unsustainable growth of entitlement spending by $1.4 trillion over the next 10 years. The administration has also indicated it will ignore the trustees’ fourth consecutive Medicare funding warning (also included in the report), passing up the special procedure the warning provides: to force Congress to take action on critical Medicare reform.
We no longer have the luxury of waiting; with each year of delay, the problem gets exponentially worse, and the likelihood grows that Congress will be forced to react with deep cuts in benefits or increases in tax or debt burdens to intolerable levels. The programs will fail to meet their obligations, and in the process will put immense burdens on the economy and the budget, crippling our ability to compete in the global marketplace and shrinking future Americans’ standards of living.
We must steer a different course. If we act now, we can transform this problem into an opportunity — to make these important programs stronger, more responsive, more resilient, more sustainable and more in line with the way our economy really works.
That is why last year I introduced comprehensive legislation called “A Roadmap for America’s Future.” (Ed. link added) My bill not only addresses the Medicare and Social Security crisis, but also Medicaid, health care and our overly complex, anticompetitive tax code, to ensure America can regain its footing on the path to a secure, prosperous future.
Here are its key components:
- It fulfills the mission of health and retirement security for all Americans by rescuing and strengthening Medicare, Medicaid and Social Security. These vital programs will be made permanently solvent under my plan.
- By reforming our tax code, it promotes solid economic growth and job creation here in America and puts the United States in a position to lead — not merely survive — in the international marketplace.
- It lifts the burden of debt from the shoulders of future generations by returning federal spending growth to sustainable levels.
This is a real plan, with real proposals, real numbers to back them and real legislation to implement it. It is ambitious, and not everyone agrees with every aspect of it. That’s fine; we must have this debate. Inaction is no longer an option.
