Entitlement liabilities cost over $500K per household

posted at 10:00 am on May 19, 2008 by Ed Morrissey

Uncle Sam wants you … to cough up a half-million dollars to fund current entitlement obligations. That would cover the lifetime benefits of all currently eligible participants in federal programs such as Medicare and Social Security — and that number will keep growing. Don’t expect to hear those figures from Capitol Hill, though, because Congress does not require the federal government to follow the same reporting rules that they have applied to businesses:

The federal government’s long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement.

That’s double the red ink of a year earlier.

Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That’s nearly $500,000 per household.

When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.

Corporations and most state governments have to declare long-term liabilities when created. The federal government, however, only declares the annual cost of entitlement programs, using the flimsy excuse that future Congresses could adjust or eliminate the programs in the future. That sleight of hand keeps the federal deficit numbers ridiculously low, and it keeps pressure for entitlement reform almost as low.

President Bush tried to address this in 2005, starting with the much more moderate problem of Social Security. Democrats insisted that no problem existed at all, and that the fiscal stability of Social Security was guaranteed for decades. Instead of acting to correct the ballooning deficit in this one program, the Democrats demagogued, claiming that Bush wanted to steal Social Security benefits from seniors — a charge Barack Obama echoed yesterday against John McCain.

McCain voted against adding Medicare Part D, opposing George Bush during the first term, and one can understand why in looking at these numbers. Just in the last year, Medicare took on $1.27 trillion in new liabilities, Social Security $900 billion, and civil-service retirement $106 billion. That comes to almost $2.3 trillion in new liabilities, which outstrips the entire federal budget of 2003. At some point, those bills have to get paid, and that’s assuming we stop adding liabilities from this point forward.

We don’t need demagoguery. We need real entitlement reform that acknowledges reality before American workers become nothing more than serfs providing funding for a massive nanny state.


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Comments

Janice Rogers Brown for VP.

funky chicken on May 19, 2008 at 10:02 AM

Yep, too bad Right Said Fred was given the road cause he wasn’t screamin “look at me look at me” naww Fred, instead was just sayin what needed to be said and promising to do it

EricPWJohnson on May 19, 2008 at 10:10 AM

Janice Rogers Brown for VP.

funky chicken on May 19, 2008 at 10:02 AM

Now THAT”S at ticket I would support.

stenwin77 on May 19, 2008 at 10:14 AM

I don’t hear ANY politicians screaming to cut entitlements. No, if fact they’re saying “Come on down” to those who break our laws and come in illegally.

I’m so sick of this. NO REPRESENTATION WITHOUT TAXATION !

stenwin77 on May 19, 2008 at 10:15 AM

The GOP will nominate one of the few candidates who can lose this election.

Labamigo on May 19, 2008 at 10:16 AM

WOW… I knew it was bad, but holy moly… I’m sorry libs, I can’t afford that, you’re gonna have to pull your own weight… that’s just simply astonishing, I bet we won’t see this on the MSM.

Kaptain Amerika on May 19, 2008 at 10:19 AM

We don’t need demagoguery. We need real entitlement reform that acknowledges reality before American workers become nothing more than serfs providing funding for a massive nanny state.

Too late I fear.

Pilgrim on May 19, 2008 at 10:22 AM

btw… does this include the monies used for my Tribe the Cherokee and all the other tribes? the Fed gives us Millions in cash, benefits and commodities every year…

Kaptain Amerika on May 19, 2008 at 10:23 AM

We don’t need demagoguery. We need real entitlement reform that acknowledges reality before American workers become nothing more than serfs providing funding for a massive nanny state.

Yes what we need is a little straight talk on entitlements and nanny state-ism.

Weight of Glory on May 19, 2008 at 10:25 AM

Well Bush did sign the drug plan, increasing our unfunded liabilities by 40%, according to David Walker former head of the GAO.

Theworldisnotenough on May 19, 2008 at 10:27 AM

Was it last year we were told that the number of non-tax paying Americans was now larger then the tax paying Americans…One of the reasons republicans want to registar the illegals is to use their tax payment to fund this huge gap in entitlements…a stop gap as best. It is looking more and more as if I will never retire….

jimwesty on May 19, 2008 at 10:29 AM

No problem. Just print more coupons, you know, the paper with portraits of George, Abe, and Alex. Cheapen the currency until we need barrels of the stuff for a loaf of bread. The Germans dealt with it. Now, it’s our turn.

There will be a time when 5 dollars for a gallon of gas will seem like the good old days.

Doom and gloom? No. When you pay people not to work or earn health benefits, someone will have to pay. My children will.

Now, go back to sleep.

saved on May 19, 2008 at 10:29 AM

“The FY 2009 President’s request for Indian Affairs is $2.3 billion in total budget authority, a net
decrease of $105.4 million from the FY 2008 enacted level. About 95 percent of the budgetIn FY 2009 Indian Affairs budget”

“supports the full time equivalent of 8,577 employees, a reduction of 124 from the FY 2008
enacted levels.”

at least it’s going down…

page 13

http://www.doi.gov/budget/2009/data/greenbook/FY2009_IA_Greenbook.pdf

Kaptain Amerika on May 19, 2008 at 10:30 AM

President Bush tried to address this in 2005

He tried a lot harder to get the Republican Party to pass a huge prescription drug entitlement program.

Valiant on May 19, 2008 at 10:31 AM

When the latest amnesty legislation was proposed, The Heritage Foundation crunched the numbers to try and figure out just what would happen to Social Security as a result of adding tens of millions of unskilled, under-educated, low-paid immigrants (and their assorted family members who would also be eligible) to the Social Security rolls. Their conclusion: it would significantly speed up the date when the system would be bankrupt. Not a single politician supporting the amnesty plans batted an eye. Why should they give a damn what their idiotic policies will cost the nation in the long run, as long as it buys them votes this election cycle?

We need to clean house, and we need to do it soon — before our house is burned to the ground.

AZCoyote on May 19, 2008 at 10:33 AM

McCain voted against adding Medicare Part D

Look Ed, I know that you love McCain and want to support him as much as it takes to get cushy access to his campaign. But this spin is a bit of a stretch. You DO realize what an extra 20 million LOW SKILLED, LOW WAGE workers will do to the entitlement program don’t you? It’s not just the bigots who are concerned about amnesty. Fire up that calculator of yours again and add another 20 million people to the entitlement programs and see what that does to McCain’s ‘conservative’ voting record on entitlement spending.

ThackerAgency on May 19, 2008 at 10:35 AM

jinx AZ

ThackerAgency on May 19, 2008 at 10:35 AM

We should elect a 72 year old to the White House and raise the retirement age for the rest of the country.

dedalus on May 19, 2008 at 10:40 AM

dedalus on May 19, 2008 at 10:40 AM

Ha! I never thought of it that way.

Weight of Glory on May 19, 2008 at 10:43 AM

…just wait till the obamanator sits in the chief executive’s chair…

locomotivebreath1901 on May 19, 2008 at 10:44 AM

You DO realize what an extra 20 million LOW SKILLED, LOW WAGE workers will do to the entitlement program don’t you?
ThackerAgency on May 19, 2008 at 10:35 AM

We will continue to see an increase in service jobs directed toward aging boomers. There will be a significant number of low skilled jobs connected with nursing homes, physical therapy, deliveries, home care. The boomers had fewer children than their parents did, but even the kids they did have won’t be enough to take care of them when the approach their 90’s.

dedalus on May 19, 2008 at 10:46 AM

This of course is not a new story, similar reports date back as much as forty years that the government was spending the money they were suppose to be saving for distribution when people retire. I have actually read parts of the Congressional Record for the period when Social Security was being enacted. Republicans argued furiously against the plan stating that it would become exactly what it has become, a giant slush fund by which government could steal taxpayer money and never pay it back. There was never any accountability put into the law for government.

The money never went into a “trust fund” as most people understand, it went into the general fund and was promptly spent to buy votes for various politicians… unfortunately Republicans often participated in this theft as well.

So here we are in the age where millions of people have paid into this system all of their working careers and are getting ready to retire and the government comes up empty handed. So expect the baby boomers to get the blame because you can be sure the government isn’t going to take the blame, no matter that they are the ones that stole and spent the money. This is where socialistic programs get you. I actually fought in court to get out of the Social Security system at one point in my life, what a futile effort that was.

And what’s really neat is that our congressmen are paid by an entirely different system for their retirements… surprise… surprise there is no problem with the funding of their lavish system.

Maxx on May 19, 2008 at 10:46 AM

Anybody know where I write to send my Opt Out letter?

EJDolbow on May 19, 2008 at 10:49 AM

It is true that the current push for amnesty is based on the percieved need to add workers to the the pool in order to fund social security and other government handout programs. It is also true that adding previously undocumented (illegal) workers to the program adds those who will to a greater extent rely on the programs when they retire, thus further burdening the programs in the future. The reason congress is pushing it is simple – they want a quick solution and wish to push the problem out to the point they themselves as individual congress members won’t have to deal with it. The true solution to the problem is not amnesty, but a scaling back of the programs, such as means-testing of social security, whereby more affluent retirees get little or no payments, along with a scaled system that allows (or requires) younger workers to allocate a portion of their SS payments to individual accounts. If congress were serious about solving the problem, this debate would be ongoing as we speak. Unfortunately, congress has realized that government payments to individuals remarkably increases their loyalty come election time, so don’t hold your breath waiting for a real solution.

Think_b4_speaking on May 19, 2008 at 10:54 AM

dedalus on May 19, 2008 at 10:46 AM

The reason ‘low skilled’ is important is because of the amount of taxes that they pay. The entitlement programs are based on the idea that you can make the money to fund it through taxes. If you have more low paying workers, you won’t have enough to fund the entitlement programs. . . but you will have more people who need to have their entitlement programs funded.

The government will cause this country to fail through irresponsible spending and policies. . . but they don’t care because through the fall, they’ll be powerful and that’s all that matters to them personally.

ThackerAgency on May 19, 2008 at 11:05 AM

This is specifically why the new immigration stuff includes provisions for more HIGH SKILLED workers from Asia and foreign countries. The idea is that they’ll make enough money that the government can tax to save the entitlement programs. 20 million low skilled workers will take MUCH more than they will give. But why would McCain or the ‘conservatives’ care? They want to make sure that they use OUR MONEY to buy votes so that they remain ‘important’.

ThackerAgency on May 19, 2008 at 11:10 AM

Shhhh go back to sleep. There is no problem shhhhhhhhhhh

/sarc

DerKrieger on May 19, 2008 at 11:11 AM

The government will cause this country to fail through irresponsible spending and policies. . . but they don’t care because through the fall, they’ll be powerful and that’s all that matters to them personally.

ThackerAgency on May 19, 2008 at 11:05 AM

That’s no doubt true. Still, regardless of irresponsible politicians the country will experience an increase in jobs for eldercare over the next 25 years. Boomers will stop producing, stop purchasing consumer goods and begin consuming healthcare services. More of the American economy will move toward the service sector, with many of those jobs requiring some training but not much education.

dedalus on May 19, 2008 at 11:12 AM

The reason ‘low skilled’ is important is because of the amount of taxes that they pay. The entitlement programs are based on the idea that you can make the money to fund it through taxes. If you have more low paying workers, you won’t have enough to fund the entitlement programs. . . but you will have more people who need to have their entitlement programs funded.

The government will cause this country to fail through irresponsible spending and policies. . . but they don’t care because through the fall, they’ll be powerful and that’s all that matters to them personally.

ThackerAgency on May 19, 2008 at 11:05 AM

Bingo! The amount of taxes those low-wage workers will generate is miniscule compared to the huge benefit bite those same low-wage workers and their families will drain out of the entitlement pool.

Insane.

techno_barbarian on May 19, 2008 at 11:15 AM

The entire notion of “retirement” must end. Americans are going to have to work until they drop dead. Sort of like the people that built the pyramids in Egypt. As Michelle Malkin would say, “Suck it up.”

My collie says:

Who wants to break the news to the general populace? Any volunteers?

CyberCipher on May 19, 2008 at 11:15 AM

dedalus on May 19, 2008 at 11:12 AM

We are in agreement, but it won’t help the entitlement situation, it will make it worse. We do and will need more nurses. . . but those nurses will make increasingly less money as payouts for Medicare recipients will need to be cut in order to maintain the solvency of the program.

ThackerAgency on May 19, 2008 at 11:16 AM

We are in agreement, but it won’t help the entitlement situation, it will make it worse. We do and will need more nurses. . . but those nurses will make increasingly less money as payouts for Medicare recipients will need to be cut in order to maintain the solvency of the program.

ThackerAgency on May 19, 2008 at 11:16 AM

I’m not optimistic about the situation. Politicians are mostly kicking the can down the road. I give Bush credit for taking a shot at it, but like Reagan he got slammed by the scaremongers. At some point a President will appoint a “blue ribbon” panel of former congressmen, governors and business leaders. The panel will make the recommendations, and both parties will agree to a cease fire regarding compromise points.

dedalus on May 19, 2008 at 11:22 AM

The situation in the States isn’t much better.

DrSteve on May 19, 2008 at 11:49 AM

Socialist
In
security

Red Pill on May 19, 2008 at 11:49 AM

Ed- glad to see you’ve come on over on this.
I started writing about this over two years ago (here, here and here).
The $57,000,000,000,000 is also considered to be a conservative number. And that number is in today’s dollars meaning that today, right now before the close of business TODAY, Congress has to put away $57,000,000,000,000. And there ain’t that money anywhere. And these numbers are not in some conspiracy chat room. They are right out there for anyone to see. And every member of Congress knows these numbers. Every Congressman and Congresswoman!
If you and I ran a “retirement”, “insurance” program like Social Security/Medicare, we’d go to jail. And rightly so (see my blog here). So, Congress runs a program that is illegal for us to run, can’t be paid for, can’t be reformed and can’t be saved.
Oh, and by the way, there is no lockbox. Read here how Social Security is run.

Amendment X on May 19, 2008 at 11:57 AM

How is Social Security an entitlement? It’s money taken straight from my paycheck with some kind of promise that I’ll get it back later.

If it’s not given back, then I’d call it theft.

Esthier on May 19, 2008 at 12:02 PM

before American workers become nothing more than serfs providing funding for a massive nanny state.

Too late.

ronsfi on May 19, 2008 at 12:02 PM

I’m betting Pres Obama and a Democratic Congress can double that number in two years.

thuja on May 19, 2008 at 12:05 PM

At least health care will be free!

Chuck Schick on May 19, 2008 at 12:10 PM

How is Social Security an entitlement? It’s money taken straight from my paycheck with some kind of promise that I’ll get it back later.

If it’s not given back, then I’d call it theft.

Esthier on May 19, 2008 at 12:02 PM

This is the really sad part. There is not now, nor has there ever been anything in Social Security law that mandates the government to give you anything back. There is a lot of convoluted language that implies that the government is suppose to give you something back but no hard language that places any kind of strict obligation for government to pay.

Social Security has been a giant ponzi scheme from the beginning. Bush really did try to do something about it by advocating a privatized system, which has worked in other countries that have similar systems. But the Democrats want no part of that, they don’t want their slush fund to go away, this could be true of some Republicans too. So they scared old people into believing Bush was trying to take their money when in reality he was trying to prevent total collapse of the system. And total collapse will happen one day, it’s inevitable.

Maxx on May 19, 2008 at 12:23 PM

Honestly, this whole mess is the people’s fault. They have elected men and women to congress who have royally screwed up everything, and then allowed them to stay in office. I really do believe a time is coming, and is not too far off, when we as the American people will say no to “taxation without representation”, and will massively kick these foolish congressmen and women out of office, and instead elect people that will only do what the constitution provides for them to do…or else they will also be kicked out of office. And making EACH household pay over 500,000 dollars for a system that is inevitably doomed sounds like a good starting place for this kind of revolution.

Trtle2001 on May 19, 2008 at 12:33 PM

Honestly, this whole mess is the people’s fault.

Trtle2001 on May 19, 2008 at 12:33 PM

Well, that will be the government’s defense, no doubt. They will not take responsibility for their deceptions, I agree to that extent.

Maxx on May 19, 2008 at 12:51 PM

So they scared old people into believing Bush was trying to take their money when in reality he was trying to prevent total collapse of the system. And total collapse will happen one day, it’s inevitable.

Maxx on May 19, 2008 at 12:23 PM

Reading over the Trustee’s Report, I feel that the collapse of Social Security is quite overrated. It’s based on growth rates of the economy that are far under historical experience. This isn’t to say that we wouldn’t be much better if Bush had had his way. I would argue that the best reason for the purposed reforms of Social Security is bribe everyone into thinking a good economy is good for them.

In fact, I would go much further and advocate a free marketish bribing of lower income groups. I advocate giving everyone a $1000 a year for their retirement while we get rid of the current system. They could only put the $1000 in domestic index stock funds until they are 65 years old, and they will of course have internet access to the exact value of their retirement funds. Thus, when the Democrats attempt socialist policies that harm the economy and the stock market, lower income individuals will see their own net worth decline and will understand the value of good economic policy. Too long has the bribery worked only in favor of socialist policies.

thuja on May 19, 2008 at 12:52 PM

Reading over the Trustee’s Report, I feel that the collapse of Social Security is quite overrated.

thuja on May 19, 2008 at 12:52 PM

It’s all in how you do the accounting, government has got pretty good over the years at blowing sunshine on this issue. Its amazing what you can do with a pencil, Enron looked great in year 2000, not so great in 2001.

Maxx on May 19, 2008 at 1:28 PM

The repubs should be running around with these figures on every show possible. SCREAMING to the people that if we don’t tack CONSERVATIVE making waist trimming cuts NOW that it is all going cruble X date.

Follow that with the LLL answers of Tax more, will mean what 500k worth? “Who has 500k to be taxed and is their even enough rich rich enough to pay for all those that don’t?”

Of course this will not happen and instead we will get more regulation, more taxes for global warming and a even HIGHER end debt entitlement cost.

The bright side I guess is that when it all does crash the LLL’s the only answer to re-build from nothing is good ole conservatism.

C-Low on May 19, 2008 at 1:41 PM

I don’t see how the US Dollar can hold up given the current U.S. Debt and these unfunded liabilities. It is in a steady decline over the past few years.

Can anyone say Hyperinflation? (and sooner rather than later).

captbill98 on May 19, 2008 at 1:57 PM

Can you imagine how much better our economy would be if SS funds were kept in a lock box? The dollar would be stronger and oil prices would be lower as a result. Arghh!

Over my working life I (and my employer) will pay in well over the $500K, but lower wage people will not pay anywhere near this amount.

The other thing that really burns me about SS is that government employees are on a completely different system. So as government grows in size, fewer people are in the pool of SS taxpayers. I say we put all government employees retirement on the SS system and we’d see screams for reform from the employees.

Snidely Whiplash on May 19, 2008 at 3:45 PM

Honestly, this whole mess is the people’s fault. They have elected men and women to congress who have royally screwed up everything, and then allowed them to stay in office.

right you are… I take my responsibility for my fellow Americans, just like I take responsibility for our other collective mistakes. however I promise you all I have been and will continue voting to correct it as often as the booth is open… that’s my promise.

now if we could just get some politicians to say that…

Kaptain Amerika on May 19, 2008 at 3:54 PM

Which one of the current presidential candidates do I vote for that is willing to go even as far as George Bush proposed to fix the system?
Throw them all out and start over. All congressmen, senators, and presidentail candidates.
Taxation without representation was the reason for the founding of this country and it will be the rallying cry for rebirth or I fear a slow agonizing death of freedom as we have known it and another great depression.

dhunter on May 19, 2008 at 4:57 PM

You’d think people would read/hear stuff like this and become instant life-long conservatives as a result. Unfortunately, though, even if we scream from the rooftops to everyone who will listen that they’re in it for $500K and growing, most will still vote for the nanny-staters because they are under the impression that THEY will not have to pay that $500,000. They figure other, richer households will have to pay $1 million each and that they will simply be beneficiaries. Really a great incentive for people to remain poor and vote Democrat so as to win this lottery of benefits, eh?

aero on May 19, 2008 at 4:57 PM

It doesn’t make a damn bit of difference since we are all going to die soon from global warming…er, excuse me…climate change.

Trainwreck on May 19, 2008 at 6:57 PM