The biggest absurdity in American politics is the fact that virtually every federal lawmaker promises Social Security and Medicare benefits that are, somehow, omitted from the budget. If the federal government were run like a business, its budget would include those promises. But it is not.
Ask a congressman what the national debt is, and he will say $8.5 trillion. That’s a lot of money, but it completely ignores our two largest and most important government programs, Social Security and Medicare. If you include the promises made by those programs to workers who are already paying Social Security and Medicare taxes, the national debt jumps to $46 trillion.
So which number is correct? Do we face a mountain, or a Mount Everest, of debt? If you believe that Congress was just kidding about your retirement or health care benefits, we owe $8.3 trillion. If you think America is serious, the total is $46 trillion.
Ifyou look closely at the annual letter you receive from the Social Security Administration, you will see that the benefits you’ve been buying with your payroll taxes are only “scheduled.” That’s a fancy word for maybe. The federal government can revoke them at will, according to the 1960 U.S. Supreme Court decision of Fleming v. Nestor. Wait a minute! Most people, including most politicians, think that America has at least a moral obligation to pay every nickel of those benefits.
Hence the disconnect: Politicians saying one thing and doing another. No surprise there. But this is your retirement and health care we are talking about. Your congressmen should not be so casual about it. Ask your senator or congressman again about the size of the debt. If they answer anything less than $46 trillion, follow up by asking whose benefits they will cut or whose taxes they will raise.
Some budget experts object to making Social Security and Medicare benefits “contractual” like private-sector pensions so that seniors could have a legally-enforceable right to them. Preserving congressional flexibility is not two-faced in their eyes, but necessary to cope with an uncertain future.
I disagree. I think that you must count Social Security and Medicare promises as if they were genuine; otherwise, you have no chance of making them so. They don’t have to be contractual in order to count them as such. Refusing to count the promises at all is tantamount to lying.
A little-known government committee, the Federal Accounting Standards Advisory Board, or FASAB, voted this summer to require Congress to account for these entitlement program expenses, as if politicians meant what they say. That may seem like common sense, but the vote was only 6-4. The private-sector members of the board favored sincerity but, sadly, the bureaucrats preferred duplicity.
Sometimes the biggest political changes happen, without fanfare, when a small group of people decide to do the right thing. The largely-unnoticed FASAB vote may turn out to be such an event.
The aging of the baby boom generation is approaching like a Category 5 fiscal storm. Congress must do everything it can to protect today’s seniors and their children and grandchildren from the budget crisis. Like a hurricane, it is completely predictable but the damage is at least partly preventable. At least one congressman, Chris Chocola, R-Ind., has compared the irresponsibility of Congress to that of the New Orleans levee commissions prior to Hurricane Katrina. Congress is focused on everything except preparing for the onslaught. It may be painful to prepare, but more painful not to.
Albert Einstein once said that the most powerful force on Earth is not hurricanes or nuclear power, but compound interest. When you have money to save, the force is with you. When you are deeply in debt, you are at its mercy.
For America to admit to itself and the world that it is $46 trillion in debt would be alarming, but it would be honest. The consequences will be worse if we fail to admit the truth. In that case, generations of Americans would not only be exposed to cruel cuts, but a government that was so cruel that it did nothing to prevent them.
Rep. Jim Cooper, D-Tenn., wrote the foreword in “The Financial Report of the United States,” published by Nelson Current.
