What’s more American than working to provide your children with a better life than you lived?
The generational promise that the old would make sacrifices so the young can have greater opportunities is being threatened by the crushing burdens of America’s ballooning entitlement programs. These programs will not only saddle our children with massive amounts of debt in the future, but are today crowding out critical investments that will be key to our long-term growth and prosperity.
The costs of our entitlement programs — Medicare, Medicaid and Social Security — are soaring and unsustainable. In less than 10 years, entitlement programs will cost our economy $3 trillion annually. Not a single major entitlement program is projected to be financially solvent in 20 years. To keep Social Security and Medicare going for another 75 years would take $40 trillion — money that, by the way, we don’t have.
Why is this happening? Demographics are a driving factor. America is graying. Soon one-third of Americans will be retired, and they will spend one-third of their lives in retirement. And while the number of Americans over 65 will jump by 75 percent over the next decade, those of working age will nudge up by just 7 percent — meaning that fewer are paying into the system. Rising health-care costs and poorly designed programs are also big parts of the problem.
Consigning our children and grandchildren to a future of debt is bad enough. Shortchanging investments they will need for our economy to grow and prosper is unacceptable. Today, entitlement programs and interest payments on our debt gobble up 85 percent of all the revenue the federal government collects in federal income and social security taxes. This leaves little left over for critical priorities like reforming our failing public education system, modernizing and maintaining our crumbling infrastructure, and conducting basic research that helps drive innovation.
This is not a future befitting a great nation. Americans have been promised a better, brighter future — and we can still give it to them. By making relatively modest reforms to our entitlement programs now, we can preserve a safety net for the poor, sick and elderly. And we can slow the explosive rate of entitlement spending growth before it drives the nation into insolvency, squeezes out funding for every other important national priority, or forces economy-crushing tax hikes.
We can take steps now to prevent the most predictable crisis in history — or we can wait until reality catches up with us and slaps us with a full-blown catastrophe. It’s up to our leaders to face the facts, step up to the challenge and act now to preserve America’s promise for every generation.
— Tom Donohue is president and CEO of the U.S. Chamber of Commerce. The opinions expressed are his own.