Guest column submitted by U.S. Senator Mike Crapo
As discussed in a recent column, addressing the debt crisis remains the most pressing issue our nation faces and my number one priority in the 113th Congress. Along with comprehensive tax reform, strengthening budget controls and addressing the spending problem, stabilizing entitlement programs is a critical part of this effort. As mandatory programs makeup the majority of federal spending, debt solutions must address automatic federal spending. Most importantly, fiscal strains on mandatory programs must be removed to ensure their continuation. We must make the most of the opportunity to improve the solvency of entitlement programs--Social Security, Medicare and Medicaid--to ensure that they are sustainable for current and future recipients.
Social Security has been an important program for more than seventy years, providing benefits to millions of senior citizens and the disabled. In order to ensure it remains solvent, serious issues must be addressed. The Social Security Trustees reported that Social Security will be exhausted in 2033, three years sooner than previously projected. After 2033, income to the Trust Fund will be sufficient to pay only three-quarters of scheduled benefits. The foremost objective in addressing the long-term health of this system is to maintain the promises to protect current recipients, while strengthening the system to guarantee benefits for future retirees.
The Medicare program faces similar difficulties. The Medicare Trustees reported the program faces an unfunded liability of nearly $25 trillion, and the program is currently on track to be insolvent in 2024, if action is not taken to reform the program. Systemic reforms are necessary to guarantee solvency, and the time to act is now. The American people saw clearly with the fiscal cliff process what happens when leaders in Congress and the White House wait until the last minute to negotiate. Hopefully, a lesson was learned from that unfortunate process. We need leaders on both sides who recognize the imminent threat of insolvency that we are facing with these important programs, and who are willing to work now on the necessary reforms.
Like Social Security and Medicare, the pressures on Medicaid are increasing. The Congressional Budget Office (CBO) reported "the aging of the baby-boom generation portends a significant and sustained increase in coming years in the share of the population that will receive benefits from Social Security and Medicare and long-term care services financed through Medicaid." Further CBO noted that the increase in beneficiaries and growing per capita spending on health care "will put increasing pressure on the budget in the coming decade and beyond. Moreover, increases in federal debt lead to higher interest payments for the government, reduce national saving, limit lawmakers' ability to use tax and spending policies to respond to unexpected challenges, and increase the likelihood of a fiscal crisis."
The solvency of these programs and the financial future of our country depend on Congress' and the President's willingness to confront these challenges. We have the ability to avoid insolvency in these programs and avoid the economic damage from our debt crisis, but we must take strong, boldactions. We must act now to reform our failing entitlement system to both achieve major cost savings and make the programs sustainably solvent. This objective will remain among my top priorities as I work with my colleagues to ensure the long-term solvency of these programs.