All you need to know about the November election is found in dueling documents: Paul Ryan’s budget and the House Democratic alternative. One is down, the other up. One “cuts wasteful spending,” while the other proposes investing in the future. Two radically different approaches to governing.
The Republican plan is in a hurry to balance the budget — slashing federal agency spending so that in a decade from now the budget will be balanced. These cuts would impact low-income populations, such as American Indians and Alaska Natives. Deeply.
And the Democrats’ budget is smart in the short-term — we do need investment now — but it fails to account for spending over a longer time frame. It leaves the answers to some big questions for a later date.
Then, truth be told, neither plan is designed for the long haul.
The United States (and much of the globe for that matter) is facing a demographic imbalance of a rising number of older people. Every day, for the next twenty years, some 10,000 people are turning 65. Think about adding that many people every day added to the rolls of Social Security and Medicare.
The good news is that Social Security is the easiest to fix, adjusting age and benefits, could make the plan solvent for the next generation.
But Medicare is wrapped in a bigger problem: the cost of health care in America.
A graphic from the Congressional Budget Office explains this well by breaking federal spending into four distinct categories: Social Security (growing); Interest on the debt (growing); all other federal spending (shrinking dramatically) and health care (growing faster than everything else). Or, as the CBO describes the problem, “Federal spending for the major health care programs and Social Security would increase to a total of 14 percent of GDP by 2038, twice the 7 percent average of the past 40 years.” (more…)