Business coalition calls for financially sustainable entitlements
A multi-industry business coalition sent a letter to Congress and the president Wednesday imploring them to take immediate action on entitlement reform.
“If we are ever to get control of these large deficits and rising debt levels, we must get control of the principal cause of these deficits — federal spending,” the letter says.
The letter notes mandatory spending — including Medicare, Medicaid, and Social Security — accounted for over 50 percent of federal spending for 2012, or $2.05 trillion. Total federal government spending was $3.56 trillion.
Revenue collected by the federal government, however, amounted to $2.44 trillion, leaving a deficit of $1.2 trillion.
“[A]ccording to the Congressional Budget Office (CBO), mandatory spending is projected to increase in the next 10 years from just over $2 trillion to over $3.5 trillion. At that time, it will represent almost 65% of total spending,” the letter says.
The spending rises so quickly due to an aging population that is not being replaced by younger workers. An estimated 10,000 baby boomers are retiring daily starting in January of 2012, and will ultimately add 77 miillion people to the entitlement system.
“Demographics are destiny,” said Bruce Josten, the U.S. Chamber of Commerce’s executive vice president for Government Affairs, in a statement of the significant demographic shift scheduled to take place.
“No one can dispute that our nation’s entitlement programs are unsustainable, and it is mathematically impossible to fix our spending problem without serious entitlement reform,” Josten said, asking Congress and the president to “achieve a Big Deal.”
“We are one big deal away from putting the U.S. back on a path to growth and fiscal balance.”
Labor unions and other progressive groups have launched campaigns during the lame duck session to urge Congress to not touch entitlement spending.
The AFL-CIO has launched a petition warning Congress not to touch entitlement benefit spending, despite impending Social Security insolvency. The same petition also asks Congress to raise taxes on the richest 2 percent, in an effort to restore the middle class.
“The kind of tax increases required to pay off debt would be far beyond what either party’s willing to do. That’s simply not the solution,” Cato Institute budget expert Tad DeHaven told The Daily Caller News Foundation.
“That’s part of the problem, pretending like this can be addressed with just raising taxes on so-called rich people, it just simply doesn’t generate enough revenue, in addition to being lousy economic policy.”
“Our nation’s entitlement programs are unsustainable. If we do not make sensible reforms, the programs will go bankrupt—and so will the nation,” the letter, signed by 232 organizations, concludes.
“If you’re looking at it from a numbers stand point, spending has to be cut,” DeHaven told TheDC News Foundation. “Or else you have to have massive tax increases, on not just the rich but the middle class as well, and even Democrats are woe to go down that road.”
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