The United States has a debt problem—and it threatens not only our long-term fiscal health, but also our future as a competitive and growing nation. Put simply, the federal government has been spending at a faster rate than revenues come in, resulting in large budget deficits and unsustainable levels of debt. By 2050, interest costs on the debt alone are projected to be more than four times what the federal government has historically spent on education, scientific research and development, and infrastructure—combined.
Federal entitlement programs are the main drivers of runaway government spending. The Congressional Budget Office projects that between 2014 and 2024 total federal spending will rise by $2.3 trillion, and nearly 90% of the federal government’s spending increases will be driven by just three items: Social Security (which will claim 29% of the increase), Medicare and other health-care programs (36%), and interest on the debt (25%). Spending on everything else—military and domestic programs alike—would barely rise with inflation.
By 2025,the cost per year of Social Security, Medicare, and Medicaid will be $3.3 trillion.
To make matters worse, even as we divert the vast majority of our resources to these programs they are growing so quickly that they are on a doomed course. Social Security, Medicare, and Medicaid cost $1.6 trillion in 2013 and will soar to $3.3 trillion per year in just ten years. Neither Social Security nor Medicare is projected to be financially solvent 20 years from now, and Medicaid’s burden is rapidly growing for state budgets as well as for the federal government. Without near-term reforms, economy-crushing new taxes or painful benefit cuts—or both—will be needed to keep the programs alive.
Addressing these challenges is the only way we’ll be able to fulfill our responsibility to protect those in need while keeping our promise of a bright and competitive future for the next generation.
The Chamber is leading an honest and fact-based conversation about our nation’s deficits, debt, and fiscal policy. We are committed to:
- Putting entitlement programs on a sustainable path by making reasonable changes and gradually phased in reforms to slow the rate of growth;
- Advancing responsible investments in infrastructure, education, R&D, national security, and other priorities essential to economic strength and national competitiveness;
- Promoting government reform and pushing Congress to pass budgets on time and under regular order and exercising broad spending restraint.