WASHINGTON — With today’s release of the annual
Social Security and Medicare Trustees’ Reports confirming the unsustainable
outlook for the federal government’s two largest programs, The Concord Coalition
urged presidential candidates to make long-term fiscal policy reform one of
their top priorities.
"This report should be required reading on the campaign
trail. Anyone who is serious about becoming our next President must be prepared
to confront the long-term fiscal challenge and be willing to lead a national
WASHINGTON — With today’s release of the annual
Social Security and Medicare Trustees’ Reports confirming the unsustainable
outlook for the federal government’s two largest programs, The Concord Coalition
urged presidential candidates to make long-term fiscal policy reform one of
their top priorities.
"This report should be required reading on the campaign
trail. Anyone who is serious about becoming our next President must be prepared
to confront the long-term fiscal challenge and be willing to lead a national
dialogue on how to deal with it," said Robert L. Bixby, Executive Director of
The Concord Coalition.
"It is understandable that Democrats and
Republicans will have different perspectives on the specifics of any reform
plan. This report demonstrates, however, that the first step is to reject the
‘Do Nothing Plan.’ The debate should be about realistic options, not about who
can promise the most without asking anyone to give anything up. In effect, those
who pledge not to consider any benefit reductions or new funding are pledging to
stand by and watch as Social Security and Medicare go over a fiscal cliff."
Bixby said.
According to the Trustees report, the cost of Social
Security and Medicare will roughly double from 7 percent of the economy today to
14 percent by 2040. To put that number in context, if the federal government
spent 14 percent of GDP on these two programs today they would consume about 80
percent of all revenues.
Despite the attention focused on when the
Social Security and Medicare Part A trust funds become "insolvent," The Concord
Coalition again warned that trust fund solvency is a poor indicator of the
fiscal outlook for these programs.
"The magnitude of our
long-term fiscal challenge should not be minimized by trust-fund accounting.
This indicator not only misleads the public about the timing and magnitude of
the looming fiscal burden, it says nothing about these programs, impact on
national savings and generational equity. Trust fund solvency also says nothing
about how society will meet the growing fiscal burden reflected in these
projections. Because the trust funds are primarily an accounting device for
keeping track of the programs’ claims on general revenues, their existence does
not ease the burden of paying future benefits," said Bixby.
"These programs must not be viewed in isolation, either
from each other or from the overall federal budget. What matters fiscally and
economically is their combined total cost. Reform efforts will need to either
reduce costs or raise revenues to pay for them. Those are the choices that must
be confronted," Bixby said.
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The Concord Coalition is a nonpartisan, grassroots organization dedicated to
balanced federal budgets and generationally responsible fiscal policy. Former
U.S. Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord’s
co-chairs and former Secretary of Commerce Peter Peterson serves as president.
CONTACT:
Jonathan DeWald
(703) 894-6222
jdewald@concordcoalition.org
