Entitlements Are the Elephant in the Room
By Thomas J. Donohue
President and CEO
U.S. Chamber of Commerce
There’s a giant elephant in the room this campaign season, and I’m not talking about a leftover decoration from the Republican convention. Our entitlement programs — Social Security, Medicare, and Medicaid — are growing faster than we can pay for them, posing a looming threat to our nation’s social safety net. Yet neither of the major candidates for president will admit it, let alone address it.
Hillary Clinton has pledged to expand Social Security by reaching deeper into the pockets of our most productive citizens, while refusing to make any needed structural adjustments to shore up the program for the long term. Although the Republican platform advocates for the programs to be modernized, the party standard-bearer, Donald Trump, has called entitlement reform a political loser on the campaign trail. In other words, the best case scenario come 2017 may be the status quo. But we know that leaving these programs on autopilot is a recipe for disaster.
According to the Social Security Trustees, on its present course the Disability Insurance Trust Fund will be empty by 2023. The Social Security Trust Fund will be depleted by 2034, requiring 23% across-the-board cuts to promised benefits. According to the Medicare Trustees, Medicare Part A, covering hospital insurance, will have to slash payments to providers by 2028. Meanwhile, total Medicare and Medicaid expenditures will continue to rise sharply and push our deficits to new heights.
At current spending levels, entitlement programs and net interest will consume 98% of federal revenue by 2026. This means we’ll have to borrow to pay for almost everything else — education, defense, infrastructure, research and development, and so on. Without some changes, our leaders will face stark choices in the not too distant future: stop investing in priorities that are crucial to our long-term competitiveness and prosperity; allow our nation’s safety net to fray, leaving our most vulnerable citizens out in the cold; or run up the federal credit card until lenders cut us off.
The good news is that there’s another choice — fix our programs now! Modest, carefully crafted, phased-in adjustments to our entitlement programs could sustain them for the long haul and protect the most at risk among us without bankrupting our country. But we need leaders courageous enough to make that choice.
Make no mistake. The true champions of these programs are the ones who are willing to reform them, not the ones who would leave them on autopilot. Entitlement reform won’t be easy, and it isn’t politically expedient. However, it’s absolutely necessary to preserving a social safety net for the sick, the elderly, and the disadvantaged.
U.S. Chamber of Commerce