Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce
June 18, 2018
The U.S. is barreling toward one of the most predictable economic and social crises in our history: the collapse of our entitlement programs. Social Security and Medicare represent our nation’s compassionate commitment to the elderly and the sick. While our government has a responsibility to protect these programs for future generations, it is currently failing to meet that responsibility—and two recent reports show the situation to be more dire than previously thought.
The 2018 Social Security Trustees Report, released earlier this month, reveals that Social Security’s costs will exceed its income this year for the first time since 1982, forcing the program to dip into its trust fund to cover benefits. This is happening three years sooner than expected, and the trust fund is now expected to be entirely depleted by 2034. Meanwhile, the 2018 Medicare Trustees Report shows that Medicare’s hospital insurance fund will be depleted in 2026, three years earlier than anticipated.
The lack of sustainability in these programs has many causes including lower rates of economic growth, rising medical costs, and a massive influx of retirees who are living longer than ever. At current spending levels, entitlement programs and net interest will consume 98% of federal revenue by 2028. This means our federal government will have to borrow to pay for almost everything else – education, defense, infrastructure, research and development, and more.
Without some changes, our leaders will face stark choices in the not too distant future: stop investing in priorities that are crucial to our society, allow our entitlement programs to collapse, or run up the federal credit card until lenders cut us off. This is why we must act now to reform Social Security and Medicare and save them for future generations. That doesn’t mean cutting them – it simply means slowing the rate of growth in the programs and making other strategic reforms.
Congress has known about this looming crisis for decades, and it has ignored it for just as long. The situation is quickly growing too serious to ignore. The U.S. Chamber of Commerce is blowing the whistle, and we’re ready to work with lawmakers on sensible reforms. The well-being of our most vulnerable citizens, the basic functioning of our government, and the economic vitality of our country depend on finding a solution before the clock runs out.