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.