Addressing the country in his inaugural address, President Obama began his second term by referencing the heroic struggles for freedom and justice that have shaped our common purpose as a nation. He called for a new commitment to making the "values of life, liberty, and the pursuit of happiness real for every American."
The President rightly pointed out that it is our duty to "bridge the meaning of these words with the realities of our time." Unfortunately, the Administration and Congress have been unable to live to that standard. The need to change our country's fiscal trajectory, including reforming entitlement programs is an unassailable reality that will define our time.
In 2010, 13 percent of the population was over 65. By 2030, it will reach nearly 20 percent. This singular fact puts enormous pressure on the federal budget. Left alone, this trend will cause entitlement spending to consume 70 percent of our budget by 2024 and crowd out all of our other priorities. While we debate our fiscal trajectory for the next ten years, we should remember that years 11-20 are even more concerning; this problem gets materially worse after ten years, when entitlement costs increase dramatically.
What does this mean? We risk crowding out our kids. Right now, total federal, state, and local spending is $26,355 per elderly American and $11,822 per child in America. That 2.5:1 ratio is projected to grow significantly across the next decade. I'm NOT advocating spending less on the elderly, but I am strongly advocating spending more on kids while also putting the country on a sound long term fiscal trajectory. To do that, we have to reduce the rate of growth of entitlement related expenditures and add more revenues. These are the facts; as elected officials we must acknowledge and act on them.
Two decades of experience as an entrepreneur and CEO has informed my view that our priorities must stress improving educational outcomes, rebuilding America's infrastructure, lowering health care costs, addressing climate change, reforming immigration, and ushering in an advanced energy economy. These steps will create jobs, reduce income inequality, and create a higher standard of living for Americans. Progress in these areas will require us to make investments and create paths to engage private capital, which will be almost impossible to do, and we will in fact go in the other direction, unless we reform Social Security and Medicare. The sequester reminds us of this. This is a choice.
I'm immensely proud to be a Democrat because of our party's history of fighting for justice, fairness, and equality. From Roosevelt to Obama, we've worked to bring seniors and children out of poverty, expanded civil rights, supported science and research, and pushed for equality of opportunity. Failing to respond to today's budget challenge in a responsible manner would undermine our legacy as the voice for working families.
There is an alternative between the unsustainable and increasingly dysfunctional status quo and proposals such as the Ryan Budget, which could hurt millions of vulnerable Americans. We can do better and we are doing a terrible disservice to the American people if we don't put forward real alternatives and demonstrate true willingness to make tough choices to serve the common good.
As Democrats we need to step forward and lead on comprehensive reform of entitlement programs to make them sustainable and affordable across the long term and allow us to invest in our future. These reforms should NOT affect current beneficiaries and should be phased in gradually over time. The Simpson Bowles commission proposed specifics -- including raising the cap on taxable income for Social Security, adjustments to retirement age, additional revenue, and a revised cost of living adjustment methodology -- to accomplish this goal.
If Democrats lead on these specific changes, as opposed to being dragged to the debate, we dramatically increase the likelihood of advancing an agenda that will benefit future generations and ensure equality of opportunity for all Americans. We can shape these reforms in a manner that is smart and fair and we can require more revenues and other spending cuts to help shoulder the burden.
There is a consensus that we have to tackle the deficit in a "balanced" manner. But what does that mean? To my mind, it means three simple things: (1) create more revenues through a "Buffett rule" style approach for individuals and by closing certain corporate tax loopholes, (2) lower long term costs of entitlement programs by adopting a form of chained CPI, raising the cap on Social Security taxes, and adjusting the retirement age for those not engaged in manual labor and (3) adjust up and down as necessary discretionary and defense spending to reflect our priorities as a country, which is vastly different than the indiscriminate cuts in the sequester. With this framework, we can manage our fiscal trajectory in the short term (years 1-10) and long term (years 11-20) while also investing in children, protecting those left behind, and protecting our nation.
The stakes are unbelievably high. We must move not only to ensure long-term viability of entitlements; we must act to ensure that our country can truly compete in the 21st century. Do we invest in our future and pay for it by raising revenues, reforming Social Security and Medicare, and trimming other programs? Or do we do nothing, underinvest in our country, and surrender our children's future to a world rapidly changing due to globalization and technology and with diminished competitive prospects? This is a choice.
Congressman John K. Delaney (MD-6) is a Democratic Freshman Class President, a Democratic Senior Whip, and the only former CEO of a publicly-traded company serving in Congress.
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