Rep. Paul Ryan (R-WI) recently introduced the “Roadmap for America’s Future”, a plan to reduce federal spending, pay off the national debt, and ensure future American prosperity. The Roadmap would create long-term fiscal solvency in the three federal entitlement programs—Medicare, Medicaid, and Social Security—which otherwise promise to drive the nation into bankruptcy. Rep. Ryan’s legislation is currently the only comprehensive proposal to reverse the federal government’s budgetary woes.
The only acknowledgment Democrats have offered of Rep. Ryan’s proposal has been largely criticism. Alternative solutions heard from the left amount to little more than a weak executive-appointed committee to explore budget reform. This implies a preference to maintain the status quo rather than truly address America’s fiscal future, and will result in nothing short of prolonged change and protection of unsustainable federal spending.
And what exactly is the status quo? According to the Congressional Budget Office (CBO), without Rep. Ryan’s proposal, entitlement spending will more than double by 2050, reaching 18.1% of Gross Domestic Product. If current tax rates are held constant, spending on Medicare, Medicaid, and Social Security will consume all federal revenue by 2052, so that all other government programs and defense spending would be paid for by staggering deficit spending. Social Security will experience red ink this year and will run permanent deficits beginning in 2016. Under the current trajectory, total government spending will reach 67 percent of GDP by 2082.
Attacks have mainly focused on Rep. Ryan’s changes to Medicare, claiming they reduce benefits for seniors. This argument dismisses the fact that, as the population ages, unfunded Medicare obligations threaten to drive the program into the ground. This would clearly be detrimental to those who expect to receive benefits in old age, but would also cripple generations to come with insurmountable new debt. Refusing to act is thus morally bankrupt on two levels: first, it promises aging Americans benefits which may not exist; second, it does so by piling debt onto future generations.
The Roadmap directs entitlements towards long-term solvency to ensure their existence for decades to come, recognizing that runaway spending cannot be reversed by tax hikes alone. If entitlements are left untouched, CBO predicts tax rates would double to cover the cost. By 2080, some Americans would pay up to 88 percent of their income in taxes, and even the lowest tax bracket would pay 25 percent. William Gale of the Brookings Institute estimates new revenue sources, such as a value-added tax of 15 to 20 percent, would be necessary to close the budgetary gap. The economic ramifications of this level of taxation would be tremendous.
If President Obama’s 2011 budget is any indicator, Democrats will not get serious about spending any time soon. The proposed budget will put the country $2.5 trillion further into debt by 2020 than would current law, leaving annual deficits above $1 trillion. This alone is irresponsible, but criticizing a solid proposal while offering no solutions of their own marks Roadmap opponents as the foe of a sustainable and economically viable future for America.