America’s Entitlement Problem, in One Chart

Feb 29, 2016 - 12:45pm

Executive Director, Strategic Communications

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Entitlement Reform

It’s easy to blame our government’s increasingly frequent and cut-throat budget battles on partisan bickering and congressional inaction. It’s easy to suggest that we could avoid these “fiscal cliffs” and shutdown threats with a bit more open-mindedness and bipartisan cooperation in Washington.

However, it’s not that simple. There’s actually a larger, more systemic problem plaguing our country’s finances, and that’s that our government leaders are being forced to fight over an ever shrinking sliver of federal revenue.

Why is it shrinking? Look no further than our nation’s entitlement programs.

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CBO Baseline Data

The areas shaded blue above represent the share of the U.S. government’s revenue (see: tax dollars) that’s reserved for what are considered mandatory spending programs. That includes our nation’s so-called safety net programs –like Social Security, Medicare and Medicaid – as well as interest on our federal debt, which is largely driven by spending on those three programs.

At the turn of the century, those programs were eating up an already massive 58 percent of the tax revenue our government was bringing in, according to the Congressional Budget Office. By 2015, that number had grown to 78 percent.

By 2026, mandatory programs will represent 99 percent of federal revenue.

Of course, that leaves us with a rapidly narrowing sliver of red – the area that represents the funding our government has left over to spend on everything from defense initiatives to education programs to road repairs. Additionally, lawmakers must find a way to pay 2.7 million federal workers from what remains in that increasingly tiny slice of the pie.

Our country can’t sustain that. It’s simply not feasible.

So yes, we need more cooperation and teamwork from our representatives in Congress. However, one of the only bipartisan collaborations that can truly start to mend our country’s financial woes is real action on entitlement reform.

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About the Author

About the Author

J.D. Harrison
Executive Director, Strategic Communications

J.D. Harrison is the Executive Director for Strategic Communications at the U.S. Chamber of Commerce.