Solvency Necessary To Uphold Valued Programs
Guest column submitted by U.S. Senator Mike Crapo
Unrestrained federal deficit spending is choking our nation's economic recovery. Mandatory programs, including Social Security, Medicaid and Medicare, account for the majority of federal spending. Therefore, long-term debt solutions must address automatic federal spending. More importantly, fiscal strains on mandatory programs must be removed to ensure preservation for future beneficiaries.
We must correct the Social Security program's expected funding shortfalls in order to ensure it can continue to provide economic security to millions of senior citizens and the disabled. When Social Security was created, average life expectancy was 64 years, and benefits were paid at age 65. Today, we are living longer, healthier lives. According to the 2010 Trustees report, by 2030, life expectancy beyond age 65 is projected to reach more than 19 years for men and 21 years for women. While this is good news, the combination of falling birthrates, increasing life expectancies and the retirement of the Baby Boomers is putting tremendous pressure on the Social Security system. The worker-to-beneficiary ratio has shrunk drastically from sixteen workers per beneficiary in the 1950s to just three workers per beneficiary today, and these numbers are expected to worsen.
The unsound effect of these circumstances results in the Social Security program paying out more on beneficiaries than it is accruing in revenue. According to data from the 2010 Trustees report, annual Social Security program revenues for this year are estimated to be approximately $734 billion while costs to the program are projected at approximately $741 billion, resulting in a deficit of nearly $7 billion. This deficit is projected to climb to more than $651 billion in 2036. Sustained shortfalls in the Social Security program result in bankruptcy of the program. Without action, all current and future beneficiaries will face an automatic 22 percent benefits cut by 2037.
Congress must take timely action to secure Social Security for our children and grandchildren with a focus on maintaining the commitments to protect current recipients, while strengthening the system to protect benefits for future generations. If we wait to address the growing problem, the only solutions will be substantial tax increases, massive new borrowing or large cuts in Social Security benefits or other government programs.
Additionally, with federal health care costs expected to grow faster than the economy and Medicare accounting for eighty percent of our debt problem, steps must be taken to control health care costs. The President's National Commission on Fiscal Responsibility and Reform's plan would start health care spending reforms through more than $400 billion in health care savings. The commission proposed repealing the unsustainable Community Living Assistance Services and Supports (CLASS) Act subsidy and permanently reforming the Medicare sustainable growth rate formula for physician reimbursement, which is now handled with temporary "band-aids."
Congress must also address Medicaid and Medicare's unfunded liabilities and repeal the misguided health care law, which worsens the debt crisis. Ensuring access to effective and affordable health care is one of the greatest challenges facing the health profession, insurers, and local, state and federal governments. Appropriately managing overly burdensome federal health care costs will better ensure that health care is available to more families.
To truly reduce our nation's debt, mandatory program spending cannot be neglected. However, regardless of needed action to reduce our nation's extreme debt, we must act to make Social Security solvent and better control federal health care spending to best ensure that this needed support remains available for current beneficiaries and future generations.
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