Tuesday, July 19, 2011

And Now, a Few Numbers

[this is an excerpt from Michael A. Walsh]

Medicare, Medicaid, Social Security and debt interest consume -- at the moment -- nearly half of our $3.8 trillion budget.

When Medicare began in 1966, it cost $3 billion; congressional estimates were that, by 1990, it would cost about $12 billion, allowing for inflation. The actual figure turned out to be $107 billion. Today, Medicare's future unfunded obligations total at least $36 trillion. Other estimates run even higher.

When Social Security began in 1935, most workers weren't expected to live past the "retirement age" of 65. The program wasn't supposed to have to pay off, except to widows, orphans and the odd male who somehow staggered to his gold watch.

Today, it's a national retirement program -- for an aging country whose life expectancy is pushing 80. In 1960, five workers supported a retiree; today, there are three, and that number falls to two in 2030. Yet the retirement age has failed to keep pace, slowly rising a couple of months a year for those born after 1938 and topping out at 67 for those born after 1960.

You do the math.

No wonder the trustees of the system themselves -- including three Obama Cabinet officials -- warned in their most recent report on the health of the entitlement system: "Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided."

So even Team Obama realizes these programs must be put on a sound footing (and likely radically restructured) to continue.

Yet the president and the Democrats still refuse to put meaningful spending cuts on the table -- and refuse completely to deal with the entitlement monster. Even though they know the numbers don't work, they're trying to lock in Obama's sky-high spending as the new normal -- and then up the ante.

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