By Sid Salter
STARKVILLE – American voters have yet to hear a clear debate about the most fundamental issue facing the U.S. over the next decade – the looming fiscal quagmire of debt and deficits fueled by federal entitlement obligations.
According to the Office of Management and Budget numbers crunched by the Center for Budget and Policy Priorities in 2011, the U.S. government spent $3.5 trillion in Fiscal Year 2010 with just under $2.2 trillion covered by tax revenues and borrowed the rest – just over $1.3 trillion.
That same fiscal year, the U.S. spent $707 billion, or some 20 percent, of the entire federal budget on the Social Security entitlement program. Another 21 percent, or $732 billion, went to health insurance entitlements like Medicare ($452 billion), Medicaid and the Children’s Health Insurance Program (CHIP).
Another $496 billion, or 14 percent, went to refundable tax credits or direct financial assistance to low and moderate income families and individuals, the disabled, children and others who qualify for federal “safety net” relief including food stamps, energy assistance and child care.
Add another $705 billion, or 20 percent, for defense and national security efforts – including $170 billion for the wars in Iraq and Afghanistan – and 75 percent of the FY 2010 budget was spent. Add another $196 billion, or 6 percent, for interest on the $9 trillion national debt in FY 2010 and 81 percent of that year’s federal budget was obligated.
That leaves 19 percent of the FY 2010 federal budget, or just under $700 billion. But from that remainder 7 percent of the total federal budget was spent on benefits for federal retirees and veterans, 3 percent each for education and transportation infrastructure, 2 percent for scientific/medical research and 1 percent was spent helping other countries.
That left 2 percent of the total federal FY 2010 budget for every other function of the federal government. Those numbers reflect the hard reality that no president and no Congress can solve the nation’s long-term fiscal woes without first addressing entitlement-driven structural debt and deficit problems.
The 2010 Social Security Trustees report found that over the next 75 years, Social Security owed $7.9 trillion more in benefits than it will receive in tax revenues. Social Security trustees reported a $21.4 trillion unfunded liability – the difference between taxes that will be paid and benefits that will be received over the lifetimes of workers and retirees already in the system.
That’s a far more ominous forecast than Congress uses to calculate the financial health of the program. And why wouldn’t Congress fudge those numbers? Congress has systematically spent through the Social Security payroll deductions paid in by workers for functions of government that had nothing to do with federal retirement benefits.
Congress further skews its reporting of Social Security’s shortfall by counting the $2.6 trillion in essentially IOUs the government has pledged to the Social Security Trust Fund.
At present, the federal government subsidizes citizens at retirement age by about a combined $25,000 a year in Social Security and Medicare benefits. As the oldest of the Baby Boomers began to hit 65 in 2011, the growing subsidy became unsustainable.
Candidates seeking federal office in 2012 who aren’t addressing this looming fiscal train wreck should be.
Sid Salter is a syndicated columnist. Contact him at (601) 507-8004 or email@example.com.