When I was a boy growing up in Minnesota, the State Fair would happen every Fall. Mom dropped me off at the gate, gave me a dollar and told me to have a good time.
I knew that dollar had to last all day. I budgeted every penny…ten cents for a ride, a nickel for a hot dog, two cents for a drink, etc. I learned at a very early age that a dollar only goes so far.
I think our leaders in Washington could use a similar lesson in budgeting.
The Office of Management and Budget recently released this year’s proposed budget and the outlook is grim. It showed that Medicare, Medicaid, Obamacare and Social Security are the largest programs in the budget. When combined with interest on the national debt, these programs are the fastest growing elements of the budget. At their current rate of growth, they will consume every dollar of taxes paid by 2041, leaving nothing for defense, infrastructure, education, or other domestic programs without going further into debt.
Let’s take a closer look.
- Medicare, Medicaid and Obamacare subsidies account for more than a quarter of all federal spending. Ten years from now, they are projected to consume more than a third of the budget.
- Social Security is our nation’s single largest program. Trustees project its costs will exceed its income starting next year, forcing it to dip into its $3 trillion trust fund. Unless something’s done–like cutting benefits or raising the retirement age–the trust fund will run out of reserves by 2034.
- Other income security programs like veterans’ benefits, food and housing assistance, federal employee retirement, and disability account for 16% of the budget.
- Defense at 15% and Interest on the national debt at 8% are the last two major categories of federal spending.
Everything else the federal government does–education, highways, national parks, our courts, foreign aid, etc.–represent just 9 cents of the federal dollar.
America’s leaders in Congress and the Executive Branch need to take a hard look at every government program. They must stop robbing future generations by raising the national debt and begin thinking like a kid from Minnesota with only one dollar to spend.