PROMISES THEY CAN'T KEEP
January 9, 2008
Today's young workers and children are about to be engulfed by a massive income transfer from young to old that will perversely make it harder for them to afford their own children, says columnist Robert Samuelson.
Yet no major candidate of either party proposes to do much about this, even though the facts are well known:
- Social Security, Medicare and Medicaid -- three programs that go overwhelmingly to older Americans -- already represent more than 40 percent of federal spending.
- A new report from the Congressional Budget Office projects that these programs could easily grow to about 70 percent of the budget by 2030.
- Without implausibly large deficits, the only way to preserve most other government programs would be huge tax increases (about 40 percent from today's levels).
- Avoiding the tax increases would require draconian cuts in other programs (about 60 percent).
- Workers and young families, not retirees, would bear the brunt of either higher taxes or degraded public services.
Facing these facts would expose candidates to three daunting problems, explains Samuelson:
- Lightening the burden on the young requires cutting retirement benefits for the old -- raising eligibility ages, being less generous to richer retirees and making beneficiaries pay more for Medicare; simply increasing taxes or cutting other programs won't work.
- We can't wait; ideally, prospective retirees would have received several decades' warning, but we've delayed too long -- we need to cut benefits for baby boomers and even some existing retirees since they are the source of mounting costs.
- Even if retirement benefits were cut, pressures for higher taxes and lower public services would not disappear; although individuals' benefits can be responsibly trimmed, the growth in the elderly population (a doubling by 2030) and rapidly rising health-care costs would still expand total spending.
Source: Robert J. Samuelson, "Promises They Can't Keep," Washington Post, January 9, 2008.
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