Skip to comments.$45 trillion gap seen in US benefits (over next 75 years, estimate from Bush administration)
Posted on 12/17/2007 1:11:03 PM PST by NormsRevenge
WASHINGTON - The government is promising $45 trillion more than it can deliver on Social Security, Medicare and other benefit programs.
That is the gap between the promises the government has made in benefits and the projected revenue stream for these programs over the next 75 years, the Bush administration estimated Monday.
The $45.1 trillion shortfall has increased by nearly $1 trillion in just one year, according to the administration's "Financial Report of the United States Government" for 2006. And, it's up 67.8 percent in just the past four years. In 2003, the shortfall between promised benefits and revenue sources over a 75-year period was put at $26.9 trillion.
The shortfall includes Social Security and Medicare in addition to Railroad Retirement and the Black Lung program.
When the gap in funding social insurance programs is added to other government commitments, the total shortfall as of Sept. 30 represented $53 trillion, up more than $2 trillion in just a year, the report said.
"Our government has made a whole lot of promises in the long-term that it cannot possibly keep," Comptroller General David M. Walker, the head of the Government Accountability Office, said Monday.
Members of Congress said the increase in the unfunded liability for Social Security and Medicare underscored the critical urgency to do something in light of the looming retirement in coming years of 78 million baby boomers.
"The longer we delay action on the issue of entitlement reform, the more difficult the solution will become," said Sen. Judd Gregg, the top Republican on the Senate Budget Committee.
Rep. Jim Cooper, D-Tenn., said the new report emphasized the need to enact legislation he is supporting that would create a bipartisan commission to make recommendations on overhauling benefit programs and then submit those recommendations to an up-or-down vote in Congress.
"If we don't take action now, it threatens to destroy our social safety net and ruin our economic prosperity," Cooper said in a statement.
The new report said that the federal budget deficit would have been 69 percent higher than the $162.8 billion reported two months ago if the government had used the same accounting methods as private companies. Under the accrual method of accounting, the deficit would have totaled $275.5 billion for the fiscal year ending Sept. 30.
Under the accrual method of accounting, expenses are recorded when they are incurred rather than when they are paid. That raises the costs for liabilities such as pensions and health insurance. The new report was released by the Treasury Department and the president's Office of Management and Budget.
The $275.5 billion deficit under the accrual method of accounting was still down by 38.7 percent from the deficit under this accounting method the previous year, when it totaled $449.5 billion.
The deficit on a cash-flow basis of $162.8 billion represented the lowest imbalance in five years. The administration noted the decline in the deficit under both measurements.
"The 2.6 trillion in record-breaking revenues that flowed into the Treasury this year reflect a healthy economy," Treasury Secretary Henry Paulson said in a statement accompanying the new report.
But officials warned that something must be done to address the significant shortfall in the government's largest benefit programs for Social Security and Medicare.
"Reducing the deficit in the short-term will put us in a better position for dealing with the longer-term entitlement issue, which can only be characterized as an oncoming fiscal train wreck," said OMB Director Jim Nussle.
Congress ordered the government a decade ago to start issuing annual reports using the accrual method of accounting in an effort to show the finances in a way that was comparable with the private sector.
As it has for every report, the GAO, Congress' auditing arm, said it could not sign off on the books because of problems at various agencies, most notably the Defense Department.
Think you are right, but Part B is only part of the problem. The rest is the skyrocketing cost of healthcare in general. It is hard to judge the eventual cost of benefits when healthcare costs continue to rise rapidly.
Another government example which most here won't argue with is military medical care. The annual DOD budget is around $500 billion, but last year the military spent $87 billion of that on medical care. That is a huge chunk of the DOD budget.
The ugly part will be the solution. I don't know about the rest of you, but I don't want any part of socialized medicine like Canada or the UK. That stuff can kill you.
No, you have that inside out. GWB threw his base to the wolves on immigration. He had plenty of defenders here on FR, me included right up to the point he slipped the amnesty knife in our back.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
What’s the Spanish word for Euthanasia?
In twenty years you will be lucky if you can get anything
from the govt - including totalitarian health care.
I think people will be more worried about safe drinking
water etc then.
1) It was built on a principles that were suspect at the time.
2) It has been raided and abused over the years.
3) Politicians REFUSE to own up to the problem out of selfish reasons. (See Republican majority under Bush Admin.)
4) Today many states and governors are greatly expanding health care coverage to middle class kids by using Medicaid.
It will likely be in our lifetime that we will witness the great train wreck and there will be much weeping and gnashing of teeth from those who will not be able to participate in the great government/politician vote buying scheme.
Translation: Because we are spineless slugs we need someone else to do the heavy lifting!
Sure we can sell everything, but we have already borrowed all the money on the planet so nobody could buy it unless we loan it back.
Again, it’s Medicare and interest that are the real problems, not Social Security. The “estimates of the present value of future expenditures, in excess of contributions over a 75-yr period” for Social Security is -$6.7 trillion. Not chump change for sure, but for Medicare it’s -$34.1 trillion!
The budget for the United States of America will be paid out of the Social Security fund for the next four years. The entire budget foreign aid (which we don’t need), our military budget, education, infrastructure and welfare, that’s why we don’t have any Social Security future. That money should have been left untouched in a lock box. Someone before me mentioned the money we were going to give the Palestinians, hell I don’t want to give anybody any money until the needs of all legal American citizens are met. Not Africa, not North Korea, not South America, not Russia, nobody. If America would stop trying to support the world our financial house would be in order.
Are you suggesting the "bi-partisan commission" known as the Congress of the United States isn't up to the task? More delaying tactics from our elected officials.
75 years from now we may all be either collecting berries and seeds or living in a Matrix reality simulator.
BTW, Bush’s Medicare drug plan is -$8.3 trillion of those future Medicare expenditures. That’s more than Social Security.
That's a lot of money!
The Gummint had best buy some more printing presses.
Your post made me laugh!
Aside from proving yet again that nothing the Left claims is to be taken at face value, the Left itself would not give General Motors or Enron any slack it it should make promises to its employees that it could not keep. Yet, that is exactly what must happen as the country finds itself in a financial bind because of careless and foolish socialist obligations that previous Administrations and Congresses have chiseled into the stone of federal law.
The coming bill is “for the children”.