We Need True Entitlement Reform—Now
We cannot solve our nation’s financial problems without addressing the growth of entitlement programs. Medicare, Social Security and Medicaid are the largest and fastest growing part of the federal budget. If present trends continue, these three entitlement programs are expected to consume the entire federal budget by 2050. The U.S. government has just hit its statutory debt limit of $14.3 trillion. The official national debt figure does not reflect what the federal government has promised to pay Americans in entitlement benefits later on. In reality, the true national debt is actually as high as $119.5 trillion when the unfunded liabilities of Medicare and Social Security are factored in. The U.S. government will never balance the budget without tackling entitlement programs head on.

We’ve been warned about the coming entitlement meltdown for many years. The Congressional Budget Office (CBO) warned in 1995 that “if we do not plan for the future, entitlement spending promises will exceed federal resources in the next century. The current trend is unsustainable.” In the sixteen years since the CBO’s warning, Congress has only enlarged our entitlement system. The time for bold reforms to entitlement programs is now. Simply tinkering with the entitlement system won’t cut it. We must face the reality that the federal government won’t be able to keep its entitlement promises in the future.

The number of younger taxpayers for each retiree has continued to decline. When the Social Security Act of 1935 passed, life expectancy was approximately 58 years for men and 62 years for women. Most people did not live long enough to collect entitlement benefits at the age of 65. Americans’ life expectancy has surged over the past seven decades. Life expectancy today is roughly 75.5 years for men and 80.5 for women. Despite the fact that Americans live 30 percent longer on average, the Social Security retirement age has never changed. Social Security was not originally designed to subsidize retirees for a third to a half of their adult lives.