Democratic luminaries are offering the party faithful many things at the Philadelphia convention this week, but fiscal rigor isn’t among them.
On Monday, Sen. Bernie Sanders spoke in support of nominee Hillary Clinton, while boasting that he and his supporters have moved the Democratic agenda further than ever to the left. He cited areas where Mrs. Clinton supports their priorities, such as moving the United States toward universal health care, and providing a Medicare option to any American 55 years old.
Also on the common agenda is free college education to the “children of any family this country with an annual income of $125,000 a year or less — 83 percent of our population,” Sen. Sanders said.
And Mrs. Clinton supports debt relief for college students, and would offer expanded Social Security benefits to elderly recipients.
But all of those expanded federal benefits would come at a cost to already overburdened federal programs like Social Security and Medicare. Current estimates put Social Security’s trust fund solvency at no more than 14 years. Medicare’s trust fund could go broke in eight years.
Meanwhile, the national debt is already a record at $19.4 trillion, with the predicted 2016 deficit at $544 trillion. The debt will rise above $20 trillion by the time President Barack Obama’s second term ends on Jan. 20, 2017. That would nearly double the $10.6 trillion national debt he inherited from President George W. Bush on Jan. 20, 2009.
As Business Investor’s Daily recently reported:
“The nation’s long-term fiscal picture has grown considerably more dire over the past year, according to the latest forecast from the nonpartisan Congressional Budget Office, driven mainly by out-of-control spending.”
The CBO now projects federal debt held by the public to climb to 141 percent of U.S. Gross Domestic Product three decades from now. That would be a record.
But before putting all of the blame for the ever-rising red-ink tide on the current president and his fellow Democrats, keep in mind that Republicans have also run up our tab while controlling the White House and, at times, both chambers of Congress. For instance, the debt also nearly doubled — from $5.7 trillion to $10.6 trillion — on President George W. Bush’s two-term watch.
So will our national debt double again to the $40 trillion range over the next eight years under a new president or presidents?
Will either of this year’s major-party White House nominees seriously address the hard decisions required to stop, or at least significantly slow, this reckless upward trend?
At least 1st District Rep. Mark Sanford, a consistent fiscal hawk, has proposed, along with Sen. Mike Enzi, R-Wyoming, a “Penny Plan” to cut one cent on each dollar of federal spending. As Rep. Sanford wrote in a guest column on our July 19 Commentary page: “The only way to limit spending in Congress is for everyone to climb in the boat together.”
Just don’t bank on either party getting on board Mr. Sanford’s frugal craft anytime soon.
Consider this fair assessment from that Business Investor article: “The growing deficit is entirely the result of increased spending,” adding that “federal spending will consume a record 28.2 percent of the economy by 2046.”
Of course, long-range forecasts of federal budgets, like long-range forecasts of the weather, are inherently shaky.
But you can count on the validity of this warning from the new CBO report:
“Large and growing federal debt over the coming decades would hurt the economy ... reduce national saving and income ... and increase the likelihood of a fiscal crisis.”
And you won’t have to wait 30 years to feel its potentially devastating consequences. The CBO predicts that Social Security’s trust fund will be exhausted by 2030. That’s four years earlier than the projection delivered two months ago by the program’s trustees.
Either way, though, Baby Boomer retirements inexorably squeeze a system that faces a daunting demographic math problem as the ratio of payers to beneficiaries will continue to dwindle. The only sustainable reform options include raising taxes and eligibility ages or reducing benefits.
Yet the expected costs of saving Medicare remain much higher — as does the amount of federal spending forecast to be consumed by overall health care expenses over the next three decades.
As noted, Hillary Clinton has pledged to expand both Social Security and Medicare, while adding more federal financial obligations under the Affordable Care Act. And Republican presidential nominee Donald Trump has promised to cut neither Social Security nor Medicare.
So in terms of our nation’s long-term fiscal health, neither candidate is offering a responsible prescription for what ails our nation’s long-term fiscal health. To hear the convention speeches, Happy Days Are Here Again. Or soon will be.