EDITORIAL: Road to ruin - Opinion

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Sep. 14, 2007
Copyright © Las Vegas Review-Journal

EDITORIAL: Road to ruin

Entitlements will bankrupt the country -- do the candidates care?

Of all the great challenges that face the next president of the United States, none is more politically daunting than entitlement reform.

Social Security, Medicare and Medicaid account for about 42 percent of all federal spending, and the country's baby boomers haven't started retiring yet. Medicare is already paying out more in claims than its taxes bring in, and its reserves will be exhausted within a decade. About the same time, Social Security's obligations will exceed its collections. Assuming Congress repays the trillions of dollars in Social Security withholdings it has borrowed, reserves will be gone by about 2040.

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But right now, Washington is wholly uninterested in making good on taxpayer liabilities. The capital is addicted to deficit spending despite record revenue collections. The national debt just topped $9 trillion -- child's play compared with the more than $38 trillion in unfunded benefits promised to the country's senior citizens over the next 75 years.

In 40 years, these entitlements, without reform, are in line to consume the entire federal budget, leaving no money for defense, law enforcement or the three branches of government, let alone welfare programs or infrastructure.

For Republicans and Democrats, forever preoccupied with their own re-election campaigns, the options aren't favorable: tax increases large enough to threaten the economy, benefit cuts, lifetime benefit caps, eligibility restrictions, overall spending reductions or some kind of privatization -- or a combination of all six. Every choice is an affront to either party's base constituencies, and worse, each alternative requires politicians to ponder the future and the crippling tax burdens that await their grandchildren.

"Those in power are thinking only for today," said U.S. Comptroller General David Walker, who heads the Government Accountability Office. "They have a 'flat earth' theory on budgeting. After about 10 years, everything falls off."

Mr. Walker is on a mission: to alert taxpayers to the coming fiscal tsunami that will wipe out the American economy if nothing is done to make federal entitlements -- and the federal government -- sustainable through the 21st century. He's convinced such reforms are possible as long as voters unite in demanding a solution and the president uses the bully pulpit of the White House to craft a bipartisan solution.

Mr. Walker leads the Fiscal Wake-Up Tour, organized by the nonprofit Concord Coalition in collaboration with the conservative Heritage Foundation and the liberal Brookings Institution. The band of budget hawks has ideas about how to best fix the problem, starting with massive health-care system reforms and some of the options listed above. But in a meeting with the Review-Journal's editorial board Wednesday, all of its members agreed that it can be accomplished only through bipartisanship and consideration of every possible policy choice.

Those criteria would appear to make solutions impossible, based on the toxic political climate in Washington and the rhetoric of the leading 2008 presidential candidates.

Sen. Hillary Clinton, the Democratic front-runner, reiterated earlier this month that she won't support personal accounts, benefit cuts or raising the retirement age for Social Security beneficiaries, and that "putting everything on the table is not an answer." Which means taxpayers can count on more inaction on entitlement reform if she's elected president.

Democratic Sen. Barack Obama has said that "everything should be on the table" except allowing citizens to invest a portion of their Social Security withholdings in personal accounts.

Democrat John Edwards said he's committed to finding a bipartisan solution, with fixes to Medicare being a higher priority than Social Security. He wants to establish a working group to study possible reforms -- just like every other president over the past three decades.

Republicans Rudy Giuliani and Mitt Romney have offered no platforms for entitlement reform.

Only Republican Fred Thompson, the newcomer to the race, has pledged to make entitlement reform a cornerstone of his campaign. As a Tennessee senator in 1999, he co-sponsored a bipartisan bill to partially privatize Social Security, among other reforms. He voted to means-test Medicare benefits. And, in a risky move for a GOP candidate, he has so far refused to rule out tax increases as part of the solution. But earlier this month, when asked how his previous support of personal Social Security accounts differed from President Bush's recent failed proposal to do the same, he responded, "I don't even remember the details of his plan." Hmmm.

Six candidates. Zero specifics.

Nevada has a chance to shape this debate over the coming year. When these candidates visit the state to raise money and court endorsements in advance of Nevada's Jan. 19 caucuses, voters should ask them to articulate their positions on entitlement reform. The 40-and-under set in particular should be leading the populist charge on this issue.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. typical wrote on September 14, 2007 01:44 PM: The next president will be faced with an international crisis of enormous proportions and an unpopular war without a solution. It is not surprising that the ridiculously conservative RJ forgets about the war and finds that "entitlement reform" is the greatest political challenge he or she will face. Not surprising in the least. Stop borrowing from the social security trust fund. John wrote on September 14, 2007 01:16 PM: The solutions to the entitlement problems quite frankly are not that complicated. Social security solvency can be extended indefinitely if you eliminate the cap on wages and means test the recipients. As a pay as you go system (there are no reserves), this is the most logical solution to the problem. Means testing Medicare would also go a long way to ensuring its solvency. As for the budget deficit in general, let the Bush tax cuts expire, tax dividends and capital gains at the same rate, impose a hard cap of inflation less 1 percent on all discretionary spending (including defense) and the budget will not only be balanced but will produce surpluses to reduce the national debt. It is immoral as a society that we are transferring the bill for our current consumption to future generations. say what wrote on September 14, 2007 12:31 PM: and this is the reason congress took themselves out of social security and went private..anybody see the connection?? Art Guterding wrote on September 14, 2007 10:59 AM: If we were not the policeman of the world we might have some money left for the folks at home. We are now delivering food in Algeria. How about inspecting the bridges in Minnisotta? Randy wrote on September 14, 2007 09:25 AM: How can you reform any entitlement program when there is not enough funding for them to work properly long enough to see what reforms are actually needed. Mostly this editorial is by 2 rich Republicans bitching about something that they will ever need to worry about. And Heaven forbid that any Republican should help anyone except himself. I would sell my soul back to the Mormons, to see Fredricks and Mitchell live on 'entitlements' for 6 months. But I am sure that my soul is safe where it belongs. Stop that idiot in Washington from wasting billions of dollars a month. It would be amazing what could be done with that money. Tell me Sherm, are you going to operate your corporation the same way Bush is running the US? You can spend all that you want, and your adverisers can pay for their ads if and when they decide that they want to. In the mean time, you must still accept ads from anyone and everyone. Russ wrote on September 14, 2007 09:05 AM: Gee, maybe the answer is quit borrowing from the entitlement programs!! Control the rest of the Government spending and leave medicare and SS alone. DAH!! Maybe we could start paying the SS system back with the money waisted in IRAQ. Timinator wrote on September 14, 2007 08:36 AM: Ain't the entitlement mindset grand! "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." Marcus Tullius Cicero SSDD Mark Wilson wrote on September 14, 2007 07:50 AM: Imagine the same people who ran this entitlement program into the ground are the same people who want to control the healthcare insurance industry, giving us universal healthcare. Mark Wilson cas127 wrote on September 14, 2007 07:39 AM: "Assuming Congress repays the trillions of dollars in Social Security withholdings it has borrowed, reserves will be gone by about 2040." And SS goes cashflow negative around 2020 - that means that every year tens of billions (later, hundreds of billions) will either have to come from increased income taxes or even more debt for future generations. (Unless, of course, we just send some members of "The Most Degenerate Generation" to Carousel and solve the problem in a just way...) Doug wrote on September 14, 2007 06:24 AM: Replace all of them. Perhaps someday they will have an election and no one will come.