Part of the reason why reforms to mandatory spending — by far, the largest chunk of US federal spending — remain elusive is that politicians are hesitant to make any cuts to promised benefits. While this is certainly an understandable worry, politicians are willfully ignorant of the other fact: Ignoring the problem will make it worse, and could cause drastic cuts within our lifetime.
Writing in USA Today, David Schoenbrod and Brian Riedl explain why:
Politicians promise changes to avoid cuts in Social Security and Medicare, but their alternatives are plainly insufficient. Democrats favor tax hikes on the rich, but even doubling the highest two tax brackets to 70 and 74 percent would close just one-fifth of these programs’ shortfalls — and even that assumes people keep working at 90 percent tax rates when including state and payroll taxes. Slashing defense spending to European levels would close just one-seventh of the gap. Single-payer healthcare proposals are projected by even liberal economists to increase the debt. Republicans favor cuts in antipoverty and social spending, but even the unimaginable elimination of all anti-poverty spending would close barely half of the shortfall.
Responsible lawmakers should move quickly to stabilize Social Security and Medicare, and take no option off the table. Delay only makes the inevitable reforms even more drastic and painful.
Read the full piece here.