August 15, 2008


What You’re Not Hearing

By Israel Ortega

From rising gas prices and global warming to the war in Iraq and health care, the presidential hopefuls haven’t hesitated to bring up many of the pressing issues facing America. And yet there is one issue that both candidates have avoided so far — even though it could threaten our nation’s livelihood for generations to come.

I’m referring to the “big three” entitlement programs: Social Security, Medicare and Medicaid.

2008, besides being an election year, also marks the beginning of an important demographic milestone: Nearly 80 million baby boomers (the term used to describe the high birth rate from 1946-64) will reach the age at which they can begin retiring early Social Security and Medicare benefits. Products of two of our country’s biggest expansions of the federal government under President Franklin D. Roosevelt and President Lyndon B. Johnson, these programs have largely remained intact since their inception.

The cost of these entitlement programs is astounding. According to the Office of Management and Budget, the current price tag to sustain these programs in 2007 alone was $1.14 trillion dollars. That’s more than the combined GDP of Guatemala, El Salvador and Honduras combined. Fortunately, that’s only approximately 8.4 percent of our country’s GDP.

But according to my colleagues Dr. Stuart Butler and Alison Fraser, the combination of the “big three” will double from the current 8.4 percent of GDP to 15 percent when today’s newborn graduates from college. That may not seem like a lot, but that is actually a really big number that will only continue to grow with time.

On top of that is the moral issue of the growing deficit we’re leaving behind for our children and grandchildren. That amounts to approximately $175,000 for every, man, woman and child in the United States. We are essentially living on borrowed time continuing to fund these expensive federal programs.

Therein lies what economists are describing as a looming entitlement crisis that threatens to drastically change how our government will spend our money. Because spending on these programs grows automatically without annual budget limits, politicians will soon have less to spend on other priorities. That means some important government expenditures — like providing for our national defense — could fall by the wayside.

Economists from both sides of the political spectrum agree. Unless Congress acts, our economy will be tested like never before. One may ask, ‘Why won’t Congress act?’

Part of the answer is that fixing the current mess may require a fundamental overhaul to properly and adequately address the situation. That will also require raising the age for retirement and targeting benefits for those who truly need them. It would first require changing the way the budget works so Congress is forced to rein in spending.

These decisions are certainly not easy to make. Plus, they come at a time when our politicians are vying for our support in an election year and promising us the world.

Elected officials run for public office to, among many things, make tough decisions for the betterment of our country. We would do well to remind them why they work in Washington, D.C.

Israel Ortega is a Senior Media Services Associate at The Heritage Foundation (

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