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Social Security, Medicare and Medicaid benefit millions of Americans, but are major drivers of our national debt, which has skyrocketed to more than $21 trillion. If every U.S. taxpayer was billed for an equal share of that debt, we would each be charged about $400,000.
The cause of our out-of-control national debt is rooted in current and long-term obligations of these three big entitlement programs, due in large part to rapidly rising costs and an aging population.
And if you think that’s bad, things are going to get a lot worse unless we make major changes to these three very needed but very expensive programs.
The Congressional Budget Office has said that entitlements are only going to grow unless and until there are systemic changes that fundamentally alter the way they are determined, financed and paid out.
Today the number of people using Medicaid, which funds health care for people with low incomes, is at an all-time high.
By 2040, Medicare, which funds health care for people 65 and older, will cover 88 million enrollees and the cost per enrollee by then is estimated to more than triple. Medicare’s hospital insurance program, known as Part A, can only pay full benefits through 2024, according to the program’s trustees.
It’s estimated that by 2036, the Social Security program will only be able to pay 77 percent of promised retirement benefits.
The Congressional Budget Office calculates that Medicaid, Medicare and Social Security will make up over 45 percent of all federal spending by 2020. If that doesn’t scare you, maybe this will – unless fundamental and material changes are made to entitlements, within 50 years entitlements could take up the entire U.S. budget.
But our government isn’t going to close up shop to fund entitlement programs. It’s unimaginable to think our future leaders will abolish our armed forces, fire the more than 2 million federal civilian employees, and do nothing but collect taxes and hand all the money over to Medicaid, Medicare and Social Security recipients.
And we can’t just let our national debt keep rising by trillions of dollars indefinitely to fund entitlements, because we won’t have the money to pay interest on the borrowed funds.
So at some point, gigantic tax increases will become an inevitable consequence of entitlement spending that is growing beyond sustainable levels. And entitlement programs will have to be cut drastically as well, because there simply won’t be enough money to pay for them.
While we may not see these big tax increases and big entitlement cuts in the next few years, they will be coming our way if we keep spending on Social Security, Medicare and Medicaid like there is no tomorrow.
What’s needed now – still two years away from the next elections for Congress and the presidency – is a bipartisan effort by Democrats and Republicans in Congress to work with the White House to find ways to control the rising costs of the three big entitlement programs and to look
Any solution has to be agreed to by both political parties to work. Otherwise, each party will be afraid to act, concerned that its members will be attacked in the 2020 election campaign by the other party for making needed hard choices.
The day of reckoning is here and financial collapse could be right around the corner unless President Trump and Congress find ways to fix the three entitlement obligations.
The longer our politicians wait to fix entitlements, the worse it gets. As we have seen with unfunded pensions, retirees who thought they could rely on them soon found out that there was no longer any money to pay out what was not coming in.
Our entitlements as they currently exist will fail, as will our national economy, without action by Congress and the president.
Our existing and looming entitlement crisis could make the Great Depression look like a bump in the road. We know what is coming because we already are feeling the effects today.
Washington is chock full of politicians, yet this crisis calls for statesmen and stateswomen to rise to the occasion and make the tough but necessary decisions to ensure entitlement programs exist as intended for those in need.
We live in the moment and thus have become “momentarians” – a people who live for today at the expense of the future. This cannot continue.
Our nation will only survive and flourish when we provide for the moment but also plan for the future. It’s time to face reality and stop pretending that dealing with the entitlement funding crisis can be ignored any longer.