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Other Views:Entitlements scenario unsustainable

10:34 PM, Mar. 7, 2013  |  Comments
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Let's face it: For most of us, the whole sequestration debate was just bewildering.

So was the "fiscal cliff" battle two months earlier. And the great debt-limitation struggle between President Barack Obama and congressional Republicans in the summer of 2011 - the one that nearly resulted in an elusive "grand bargain" over spending cuts and taxation.

For those of us who don't spend our waking hours contemplating the consequences of hiking marginal tax rates on couples earning $450,000 a year, the political struggles of recent years over federal debt, taxation and spending can be overwhelming.

What is the point of it all?

The point of the entire consuming debate in Washington, D.C., has been about paying the bills for the great debt drivers of the budget: national defense, Social Security, Medicare and Medicaid.

The latter three are our national "entitlement" programs - meaning, all citizens are entitled to the benefits as their age or circumstances warrant. U.S. entitlement programs are growing at a rate that will consume the vast majority of the nation's public resources and then some.

In 1962, entitlement programs accounted for 27 percent of the federal budget. By 2017 - such spending will take at least 67.5 percent. With at least half of the balance dedicated to interest on the national debt, that will force defense and all other federal spending to compete for the comparatively paltry remainder.

Whatever else that scenario tells us, it defines the word "unsustainable."

For some time, some responsible voices have warned of the consequences of unrestrained spending combined with inadequate tax policies. David M. Walker, a former U.S. comptroller general, has made it his life's mission to warn Americans of the fiscal peril of inaction on entitlement spending.

Anyone who thinks the current, fast-rising entitlement-spending curve is the result of bad federal investment decisions or the 2008 economic nosedive should have a look at Walker's dire projections from a dozen years ago. Lacking serious reform, the unsustainable costs of the programs have been perfectly, depressingly predictable for a long time.

The resolutions necessary to head off budgetary suffocation by the entitlement beast are as apparent as the causes of the crisis. Walker has outlined them. So, too, has the debt-reduction commission appointed by President Obama and headed by former U.S. Sen. Alan Simpson and former Clinton administration official Erskine Bowles.

To cut debt, comprehensive tax reform is a must. So is rational containment of discretionary spending.

To reform entitlements, containing health-care costs is a must, whether by increased co-pays or premiums, curtailed benefits or moving to a voucher system that gives citizens the discretion to spend a prescribed sum on health care as they see fit.

Reform of Social Security is more straightforward. The retirement age has been hiked before. It may be time to raise it once again. And increase the cap on Social Security payroll taxes.

The answers to avoiding becoming Greece are no mystery. All it takes is the political will to implement them - a commodity in depressingly short supply in Washington.

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