Entitlement Mentality

The bill for all those free retirement benefits is finally coming due.

If you forgot to get a Christmas present for Charlie Rangel, don't worry. The congressman picked one out for himself, and he's sending you the bill: $2 million for a shiny new Charles B. Rangel Center for Public Service at City College.

The New York Democrat's Monument to Me was one of about 9,000 earmarks in the omnibus spending bill Congress approved before going on vacation. Most represented a more subtle form of self-aggrandizement, aimed at maintaining power and prestige by currying favor with voters.

According to Citizens Against Government Waste, the total cost of the 11,000 or so earmarks in the omnibus bill and an earlier defense bill is about $14 billion, which is not much in the context of a $2.8 trillion federal budget. But the same tendency that explains the persistence of earmarks—the habit of staying popular by pretending your constituents can get something for nothing—also explains the failure to address the federal government's increasingly dire fiscal situation.

The root of that situation is not earmarks, which represent less than 1 percent of federal spending. Nor is it the war in Iraq, which at $100 billion or so a year accounts for less than 4 percent.

So-called entitlement programs are the reason "America faces escalating deficit levels and debt burdens that could swamp our ship of state," as Comptroller General David Walker put it in a recent speech. Social Security, Medicare, and Medicaid account for 40 percent of federal spending and are expected to consume 51 percent in a decade.

Right now Social Security makes the federal fiscal picture look better than it really is, since the program generates a surplus that masks the true size of the deficit. In fiscal year 2007, for example, the official budget deficit was $163 billion; excluding the Social Security surplus, it was more than twice as high.

Since the government spends the surplus on other programs, the Social Security "trust fund" consists entirely of federal bonds, and those IOUs will come due soon. The oldest baby boomers become eligible for early retirement in 2008. They will start drawing Medicare benefits in three years.

The result, said Walker, will be a "tsunami of spending" that "will never recede." Under current law the estimated gap between the benefits retirees have been promised and revenue to fund them is $53 trillion, of which $34 trillion is due to Medicare.

Nearly one-quarter of that long-term Medicare deficit, $8 trillion, is attributable to the prescription drug benefit championed by President Bush and approved by a Republican-controlled Congress. "Incredibly," Walker noted, "this number was not disclosed or discussed until after the Congress had voted on the bill and the president had signed it into law." He said the bill's passage "arguably represents government 'truth' and 'transparency' at its worst."

Although it was presented as a solution to the dilemma of senior citizens forced to choose between eating and taking their medicine, the drug benefit is not means-tested. Like Social Security and Medicare generally, it transfers wealth from young workers to retirees who are often financially better off, buying the votes of older Americans with their grandchildren's money.

Not that the Democrats, who criticized the drug benefit as insufficiently generous, are any better. If you believe a Democratic president would be more fiscally responsible than Bush, have a look at the campaign ad that presents "Universal Health Care," "Alternative Energy," "Middle Class Tax Breaks," and "Universal Pre-K" as Christmas gifts lovingly wrapped by a beneficent Hillary Clinton. Unlike Charlie Rangel, at least Clinton wants to buy gifts for us, but she's still using our money.

"Our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases," Walker noted. Yet Clinton is making even more promises, and she proposes to do it all while cutting taxes.

I think I prefer Rangel's grandiosity. It's a lot cheaper.

© Copyright 2007 by Creators Syndicate Inc.