Editorial: Slinking away from U.S. budget reality

  • Updated: February 14, 2011 - 7:34 PM

President, Congress ignore the real drivers of the nation's debt.

Photo: Associated Press, (AP)

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The flurry of deficit-reduction plans released late last year were supposed to kick off a national "adult conversation" about the nation's metastasizing long-term debt problem.

So when is that conversation going to begin? It certainly didn't happen on Monday when President Obama released his $3.7 trillion budget request for 2012.

While the president's plan included some painful cuts that should stabilize the nation's debt level relative to its economic output, it continued the reckless fiction that the country's books can be balanced without reforming these expensive entitlement programs: Medicare, Medicaid and Social Security.

Even with the president's cuts, the nation's publicly held debt is expected to increase $7.2 trillion over the next 10 years.

Unfortunately, the president has plenty of company in this head-in-sand financial management. Republican U.S. House members, who swept to victory in November on promises of fiscal sanity, have yet to deliver. Instead of putting everything on the table, as every single credible deficit-reduction plan calls for, they've yet to touch Medicare and Social Security, and they've gone easy on defense.

Instead, GOP House members have focused most on a small chunk of the budget -- nondefense discretionary spending. This includes national parks, veterans' health programs, the National Institutes of Health, the U.S. Coast Guard and the U.S. Centers for Disease Control. Nondefense discretionary spending comprised 15 percent of the nation's 2010 budget, according to the Center for American Progress, a Washington, D.C., think tank.

The nation would still be in the red even if this spending category could be eliminated entirely.

The reality is that federal spending on Medicare, Medicaid, Social Security and defense dwarfs everything else. It's just not possible to balance the nation's books without reining in these costs.

In 2010, 20.3 percent of federal dollars went to Social Security.

Another 20.3 percent went for defense. Medicare, which provides health care for the elderly, accounted for 12.9 percent. Medicaid, which provides health care for the poor and much of the nation's nursing home care, swallowed 8.9 percent of federal dollars spent last year. In contrast, two welfare programs often held up as examples of profligate federal spending -- Temporary Assistance for Needy Families and Supplemental Nutrition Assistance -- consumed 2.38 percent of federal dollars in 2010.

Tackling the costs of the big entitlement programs and defense isn't easy, which is why the nation's political leadership has slunk away from the challenge for years. No one wants to tell voters the truth.

Taxes have to be raised to pay for these popular programs, or the nation has to spend less on them, or both.

Pretending otherwise delays the reforms needed to sustain these programs and only makes the solutions inevitably enacted all the more painful. In the meantime, more and more tax dollars must be siphoned off to feed these programs' gargantuan appetites.

The risk in that approach is too little spending on other important national needs, including transportation, education, medical and scientific research, and infrastructure.

Minnesota's congressional delegation should be united in opposing any cuts that would jeopardize the $920 million Central Corridor light-rail line only a few months before federal officials are expected to sign off on their $450 million share of the project.

The nation's graying tsunami of baby boomers is often cited as the key reason to reform the big entitlements and get defense spending under control.

But younger generations also have a huge stake in resolving this soon. With generous pensions a thing of the past, they must shoulder more responsibility for funding their retirement.

That requires years of planning and saving. They deserve to know now if the programs their parents relied on will be there in years to come.

  • IGNORING THE ISSUES

    "Both the Congress and the president are ... ignoring the entitlements and mostly ignoring the defense cuts that have to be part of a final compromise. What they're doing is dancing a little war dance, but they're doing it with toy weapons.''

    Former Minnesota Congressman BILL FRENZEL, now with the Brookings Institution

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