Within weeks of taking office, the next president of the United States must begin fitting his or her promises and plans for the nation’s economy into a budget proposal. It is likely that no challenge will be greater than coming up with a budget that puts America on a more responsible fiscal course. Over the last decade, unsustainable fiscal policies have driven our national debt from $7.9 trillion to $18.2 trillion. Of that current debt, $13 trillion is debt held directly by the public, with the remaining $5.2 trillion owed by the U.S. Treasury to other parts of the government.
Year after year, under both Republican and Democratic presidents, spending by our government has exceeded revenues. Budget deficits exceeded $1 trillion each year from 2009 to 2011, and while deficits have dropped for the past four years, they are expected to begin rising again soon — to $489 billion in 2018, $763 billion in 2021 and back over $1 trillion in 2025. The Congressional Budget Office (CBO) projects that an aging population and rising health care costs per person will push spending upward for some of the largest federal programs if current laws governing those programs remain unchanged.
By 2040, the CBO estimates that debt will be higher that it was immediately after World War II — its largest level in history. Economic growth simply will not keep pace with the growth of the debt.
With the next presidential election less than 16 months away, the Concord Coalition and the Campaign to Fix the Debt have joined forces in the First Budget initiative, an effort calling on every presidential candidate to tell voters specifically how he or she would address the national debt in the first budget of a new administration. As one of its leading questions, The First Budget initiative asks each candidate to discuss his or her plans to make Social Security solvent and secure for future generations.
Social Security, which provides retirement and disability income to 60 million Americans, is the largest federal program, accounting for nearly one-fourth of all spending, according to the Concord Coalition. Despite dedicated revenues from employee and employer payments, as currently structured by Congress, Social Security promises more benefits in the future than it can deliver. It has been paying out more than it takes in annually since 2010. In 1960, there were approximately five workers for each Social Security beneficiary. Today’s actuarial ratio of three workers for each beneficiary is projected to shrink to two workers per beneficiary by 2030.
The 2014 Trustees’ Report projects that combined Social Security trust funds will be depleted in 2033, resulting in an across-the-board 23 percent benefit cut. And the Social Security Disability Insurance fund is projected to be depleted late next year. The options for addressing those realities are as obvious as they are troublesome: place a larger tax burden on employers and workers or begin rationing benefits to retirees. Delaying or putting forward commonly cited non-solutions only will make matters worse. It’s time for some forthright responses from those who would be president as to how they and Congress should address the problem.