(Alexandria, VA) -- The latest government data should provide Congress with even more reasons to enact a comprehensive overhaul of Social Security and Medicare before a taxpayer bailout is triggered, according to the 350,000-member National Taxpayers Union (NTU). Today's report from the Trustees of Social Security and Medicare once again highlighted the immense fiscal burden our nation's twin entitlement programs place on U.S. business, federal debt, and taxpayers. The Trustees predict that Medicare Part A will exhaust its trust fund in 2018, and Social Security will be insolvent by 2040.
"For nearly 15 years these Trustees reports have warned lawmakers of pending entitlement liabilities, but Washington has chosen political expediency over the best interests of taxpayers," said NTU President John Berthoud. "Given that Medicare's slide toward collapse is projected for the end of the next decade, Americans can only hope that Congress will wake up and bring these programs under control without raiding taxpayers' wallets."
Dating back to 1992, the Trustees report has provided one bleak fiscal picture after another. In 1992, the Trustees noted that the pending retirement of the America's "baby-boom" generation would precipitate the eventual fiscal demise of Social Security. It noted, "... tax rates scheduled in the present law are expected to be insufficient to cover program expenditures." Instead of heeding these warnings about long term debt, however, Washington has chosen to charge more money to future taxpayers without significant budgetary offsets.
As an expert in federal finance, Berthoud pointed out that the combined liabilities of Social Security and Medicare will force either triple-digit tax increases or unsustainable borrowing. "Our nation simply can't remain competitive in today's global marketplace if we enact the tax increases some are proposing to keep our entitlement programs solvent. Fundamental reforms, not higher taxes, are the answer for our pending fiscal challenge," Berthoud noted.
Berthoud also observed that these entitlement shortfalls are not as far off as some policymakers would like the public to believe. In the next nine years, Medicare Part A will run a combined deficit of $112 billion, a fourfold increase from last year's projection. This reality has so far spurred little debate on Capitol Hill, a situation NTU's members hope to reverse. Just a few of the many NTU-backed initiatives for change include modestly restraining the growth of future benefits, preventing a cost explosion in the Medicare Part D prescription drug program, and helping Americans save more for their own retirement.
"Our nation simply cannot let Washington get away with inaction on the issue of restructuring our shaky entitlement system," Berthoud concluded. "With trillions of dollars in liabilities looming over taxpayers, citizen outrage just might compel a few principled politicians to enact innovative reform while still protecting Americans from the prospect of higher taxes down the road."
NTU is a non-profit, non-partisan organization working for lower taxes and smaller government. Note: More information on entitlements, along with recommendations for budget process reform and spending reductions, may be accessed online at www.ntu.org.