Today, an authoritative and diverse group of scholars warned the American people: “If present trends continue, the nation’s deficit will reach unmanageable proportions, other vital public needs will be further squeezed, and/or taxes will have to rise continuously to levels that could restrict economic growth.” No, these scholars were not talking about defense spending. Instead the 16 federal budget experts from seven think tanks (including: American Enterprise Institute, Brookings Institution, Concord Coalition, Heritage Foundation, New America Foundation, Progressive Policy Institute, and Urban Institute) issued a paper concluding that automatic escalating benefits from Social Security, Medicare, and Medicaid will cause “unsustainable deficits in the federal budget” that “threaten the health and vigor of the American economy.”
The report explains: “Our political leaders have been avoiding this enormous issue – largely because it requires that the public be told that not all past promises can be met. Our group has come to together, from diverse points on the political to sound an alarm: if America is to remain strong, such evasions must end.” The report specifically rebuts several common myths including:
- Eliminating waste in government programs will solve the deficit problem.
- The deficit problem can be solved by delivering health care more efficiently.
- We just need to raise taxes starting with rolling back some or all of the Bush tax cuts.
The reports authors have many different and often conflicting solutions to the problem, and the paper provides links to much of their work, but a consensus was formed on three specific steps Congress could take to help increase the honesty of the debate in Washington. They are:
- The three major entitlement programs should be converted into regular “discretionary” programs that compete on a level playing field with such programs as defense, rather than pre-empting funds for these programs or automatically running up long-term deficits.
- Congress and the President should enact long-term budgets for Social Security, Medicare, and Medicaid and be required to review them every five years. The rules for the five-year review must include a trigger or action-forcing device that automatically make changes when projected spending exceeds budgeted amounts.
- The long-run costs of these three programs should be made visible in the budget at all times and considered when decisions are made.