A nation of Floridas. That is what our aging nation will look like by 2025, when the population of elderly Americans will be what it is in Florida today.
The demographic tidal wave, brought on by the retirement of 76-million baby boomers will have major consequences for society, some of which we can take as they come. Not the least is the impact of the baby boomers' retirement on the federal budget.
That is why it is so frustrating that neither President Clinton nor Bob Dole is using the bully pulpit of a presidential campaign to sound the alarm, and propose solutions. Instead, they are engaged in a conspiracy of silence, afraid that voters can no longer bear to face the truth about the tough choices our next president will face.
But denying that there is a problem won't make it go away. More than 50 percent of the federal budget now goes to entitlement programs, most of which pay benefits to elderly Americans regardless of their financial standing. Social Security, Medicare, Medicaid and federal pensions alone make up 44 percent of the budget today. Within 10 years _ still several years before the first baby boomers retire _ they will comprise 53 percent of the budget.
It is little wonder that a bipartisan commission appointed by President Clinton in 1994 to study the entitlements problem warned that "current trends are not sustainable." According to the commission, which was chaired by Sens. Robert Kerry, D-Neb., and John Danforth, R-Mo., entitlement programs and interest on our massive federal debt will consume all federal revenues by 2012, the same year the first boomers start retiring. In other words, we could shut down every federal agency, the White House, national parks, Congress and the Department of Defense, and still not have enough money to balance the budget. Needless to say, if we fail to make the necessary changes before reaching this point, America will experience a fiscal meltdown that will dwarf all other problems.
So, how would candidates Clinton and Dole propose avoiding this disastrous scenario?
President Clinton, while joining Bob Dole in silence about Social Security's long-term fiscal problems, has engaged in a shameless campaign of demagoguery against Republicans on the Medicare issue. According to the White House spin doctors, the proposed GOP cuts in Medicare are "unnecessary" and "unconscionable." One wonders how Clinton squares these charges with the fact that two years ago, in his health security act, he called for larger cuts in Medicare than Dole is now proposing. Or that the presumably conscionable cuts in the president's latest budget would, over the next six years, mandate that Medicare spending be only 3 percent more than the GOP figure.
The truth is that, when not running for election, Democrats understand that Medicare costs must be controlled. They know that, according to the Clinton administration's own projections, earmarked tax revenues will cover just three-quarters of Medicare's hospital insurance benefits by the year 2000. They also know that, absent reform, total Medicare spending will double as a share of the nation's economy by 2020. No plan now on the table _ not even the "draconian" GOP plan _ comes close to closing Medicare's near-term funding gap, much less to ensuring its sustainability when the baby boomers retire.
Some pundits have taken comfort in the fact that the president's "Mediscare" campaign is a cynical election-year ploy. If re-elected, the conventional thinking goes, Clinton will set aside the partisan rhetoric and undertake the reforms everyone knows are essential. Perhaps. But after having poisoned the well, he may not be able to return to it. History is filled with examples of second-term presidents who were supposedly free to act in the public interest, but who turned out to be hemmed in by prior campaign promises.
Dole, long known in Washington as one of the most responsible members of Congress on budget issues, is now promising every voter in America a free lunch in the form of massive tax cuts. The Dole tax cut, $548-billion over the next six years, dwarfs even the $355-billion tax cut originally called for in the Republicans' Contract With America.
Is it really possible to cut taxes by $548-billion, take two-thirds of the federal budget (Social Security, Medicare, defense and interest on the debt) "off the table," and still balance the budget? Not without making devastating cuts in the rest of our government programs _ including education, law enforcement, national parks, environmental protection, transportation and many other programs. The level of spending cuts required in these increasingly lean programs to pay for such a large tax cut would have to go well beyond even the most ambitious Republican plans of the past two years.
Promising a big tax cut to voters who have experienced stagnant wages of the past two decades may sound like good politics. But if Dole really wants to do what's best for our long-term economic growth, he should campaign on the same policies that served him so well in the past three decades as a highly respected member of the U.S. Senate. Let's balance the budget, put our skyrocketing entitlement programs on a sustainable path and restore long-term economic growth first. Then, and only then, we can talk about what will be a well-deserved tax cut.
Tonight in Hartford, Conn., Clinton and Dole, and Wednesday night in St. Petersburg, Vice President Gore and Jack Kemp, will engage in a spirited debate over their parties' competing visions for America's future. Our message to them is simple. The budget cannot be balanced nor our economic future secured so long as our leaders insist that large entitlement programs remain "off the table." Major tax cuts that take effect before serious entitlement reform is enacted only make our long-term fiscal predicament much worse.
As we approach the 21st century, we stand at a crossroads. We can continue the same policies and pray that soaring entitlements and interest rates somehow won't affect our nation's future. Or we can face the music. We can recognize that we must make some hard choices now in order to ensure that our nation's economy is robust enough to allow our children at least the same standing of living as today.
The real question is not whether we need to make changes. The question, instead, is whether we will make the changes early, fairly and with compassion, or wait until the last minute, leaving millions of Americans unprepared for the dramatic entitlement cuts and tax increases that could easily crush our economy.
Robert Bixby is national field director for the Concord Coalition. The coalition, a grass-roots organization with 170,000 members nationwide, was founded in 1992 by former U.S. Sens. Paul Tsongas and Warren Rudman.
The candidates and Medicare
How President Clinton and Bob Dole would slow the growth of Medicare _ the health insurance for about 37-million, mostly elderly.
Clinton and Dole compared
The year-by-year spending totals under Clinton's latest proposal and the congressional Republican plan that Dole endorses. Over six years, Clinton would spend 3 percent more. In billions:
1996 1997 1998 1999 2000 2001 2002
Clinton $197 $210 $228 $243 $260 $279 $301
Dole $198 $209 $226 $238 $253 $269 $281
Has two parts: Part A, covers hospital care; Part B, covers doctors' services.
Part A: Financed mostly through a payroll tax paid by workers and employers. Its trust fund is going broke.
Part B: Financed by premiums paid by elderly and general Treasury revenues. It contributes to the budget deficit.
Sources: Medicare Trustee Report, Congressional Budget Office, Senate Budget Committee.