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Morning Bell: Throwing Our Fiscal Health Overboard

Posted By Conn Carroll On February 13, 2008 @ 9:01 am In Ongoing Priorities | Comments Disabled

boomerx-large.jpg [1]The United States passed a generational milestone yesterday when 62-year-old Kathleen Casey-Kirschling became the first baby boomer to receive [2] a Social Security payment. A life-long Democrat [3], Casey-Kirschling (pictured to the right on her yacht) proudly told reporters from her winter home in Vero Beach, Fla., “I trust Social Security.” A summer resident of Earleville, Md., Casey-Kirschling is the first of an estimated 7,900 baby boomers turning 62 each day this year [4] — making them eligible for the federal retirement benefits averaging $1,079 a month.

If only those who studied our government’s budget shared Casey-Kirschling’s trust in our nation’s entitlement program. If current inaction on Social Security continues, the system will begin paying out more in benefits that it collects in payroll taxes in 2017 [2]. Combined with Medicare’s unfunded liabilities, our country’s entitlement programs saddle every newborn with a $270,000 unsecured mortgage at birth [5]. Each year the projections only get worse. This past year the Social Security and Medicare Trustees [6] increased the estimated long-term unfunded obligations [7] of Social Security by $200 billion and Medicare by $3.8 trillion. To put it another way, the $4 trillion increase represents about a third of our total economy.

These programs can still be saved from being thrown overboard but we must act fast. In the short term we must put the “insurance” back into “social insurance” [5] by restricting the availability of benefits in Social Security and Medicare to those who really need assistance. In the long term, we must stop the fantasy budget process that sets entitlement obligations in stone. Instead, Congress should ensure that the long-term costs for entitlement programs are built into the budget process and considered along with other priorities like defense, education and tax policy. Only through these common-sense measures can Casey-Kirschling’s faith in Social Security be affirmed.

Quick Hits

  • The Berkeley City Council rejected a motion to apologize to the Marines [8] last night, instead rescinding only the most hateful portions of their anti-Marine rhetoric. The Council also left in place four other anti-Marine policies, including free parking for Code Pink.
  • The number of businesses taking part in the government’s electronic employee verification program E-Verify [9] grew from 14,625 employers a year ago to 52,000 today.
  • At the Brookings Institution, Exelon Corp. CEO John Rowe called for a political consensus on global warming, noting that fixing the problem will require the power industry to invest at least $400 billion in new generating facilities and win greater public acceptance of new power plants, including nuclear ones [10].
  • Even though a large, bipartisan coalition passed much-needed FISA reform [11], with protection for cooperative telecom companies, Democrat House leaders indicated last night they wanted another three-week extension to consider the bill. The House has had since Aug. 5 to consider the changes.
  • Rep. Henry Waxman (D-Calif.) pledged [12] not to request any earmarks in this year’s appropriations bill telling colleagues: “Congressional spending through earmarks is out of control.”

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URL to article: http://blog.heritage.org/2008/02/13/morning-bell-throwing-our-fiscal-health-overboard/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/2008/02/boomerx-large.jpg

[2] first baby boomer to receive: http://www.usatoday.com/money/perfi/retirement/2008-02-12-boomer-social-security_N.htm

[3] life-long Democrat: http://www.usatoday.com/news/nation/2005-12-29-first-boomer_x.htm

[4] first of an estimated 7,900 baby boomers turning 62 each day this year: http://www.tcpalm.com/news/2008/feb/12/no-headline---13vboomer/

[5] $270,000 unsecured mortgage at birth: http://www.heritage.org/Research/Family/hl1039.cfm

[6] the Social Security and Medicare Trustees: http://www.heritage.org/Research/Budget/wm1430.cfm

[7] unfunded obligations: http://www.heritage.org/research/reports/2012/06/cbo-long-term-budget-outlook-on-the-nations-fiscal-future

[8] rejected a motion to apologize to the Marines: http://www.insidebayarea.com/ci_8247988

[9] electronic employee verification program E-Verify: http://www.nytimes.com/2008/02/13/us/13immig.html?ref=todayspaper

[10] including nuclear ones: http://www.chicagobusiness.com/cgi-bin/news.pl?id=28167

[11] a large, bipartisan coalition passed much-needed FISA reform: http://www.cbsnews.com/stories/2008/02/12/politics/politico/thecrypt/main3823868.shtml

[12] pledged: http://thehill.com/leading-the-news/waxman-wont-request-earmarks-this-year-2008-02-12.html

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