Entitlement Deficits Are No Longer Next Generation’s Problem
DALLAS, TX (June 4, 2004) – Social Security and Medicare benefits are on a course to crowd out funding for every other government program in the absence of significant tax increases, according to a new report co-authored by Social Security and Medicare Trustee Thomas R. Saving. The report, released by the National Center for Policy Analysis (NCPA), documents the startling speed at which elderly entitlements will balloon.
“Medicare and Social Security are already eating into the government’s discretionary spending and without higher tax revenues will soon begin to crowd out other programs,” said NCPA Senior Fellow Thomas R. Saving, director of the Private Enterprise Research Center at Texas A&M University. According to the study:
- This year for the first time in recent history, the federal government will have to use general revenue to pay Social Security and Medicare benefits – about $45 billion, or 3.6 percent of federal income taxes.
- The general revenue requirement as a share of income taxes will double in less than five years; and five years beyond that, it will double again.
- In 10 years, one out of every 7 income tax dollars will be needed; in 15 years, we will need one in every four.
- By 2030, about the mid-point of the baby boom retirement years, we will need more than half of federal income tax revenues to pay promised benefits.
- By 2040, we will need two of every three income tax dollars; by 2050, three of every four.
- By 2070, the unfunded deficits in Social Security and Medicare will require 100 percent of federal income taxes.
“The choices are going to be difficult,” said Andrew Rettenmaier, executive associate director of the Private Enterprise Research Center at Texas A&M University and the study’s co-author. “Beginning in the next few years we are going to have to start raising taxes, cutting benefits or squeezing other federal programs.”