- Entitlement spending is driving all of the growth in federal spending.
- Entitlements face a fiscal shortfall – those with contributory taxes do not bring in enough revenue to cover their future cost.
- Unless Social Security and Medicare are put on a sound fiscal path, there is no hope for long-run affordability.
- Failing to restrain to spending will lead to higher taxes, fewer available services, and slower economic growth.
How To Think About Entitlement Reform
- The United States faces a fiscal challenge unlike any in its history, driven entirely by spending on federal entitlement programs.
- The United States is borrowing half a trillion dollars a year it doesn’t have. In ten years, it will have to borrow a trillion dollars a year.
- Social Security, Medicare, and interest payments against the debt are the three fastest growing large expenditures.
- Social Security and Medicare do not bring in enough revenue to cover their costs.
- Reforming Social Security will require benefit cuts for future retirees.
- Reforming Medicare starts with gradually transforming it into a true insurance program that offers greater financial protection against the high cost of catastrophic illness.
- Reining in federal spending has to happen immediately.