Automatic Spending Growth is Unsustainable
Every American should be concerned about the growing national debt and the out-of-control government spending that contributes to it. Frankly, I believe this issue isn’t discussed enough on the national level. While the complexity of government debt and deficits might not make for exciting television news, Washington’s spending problem will have real and profound consequences for all of us if it isn’t addressed.
Most everyone agrees with the need to eliminate waste, fraud and abuse in the budget. Generally, the federal government needs to be smaller, and some functions ought to be left to the states as I believe our founders intended. However, even the most aggressive restructuring of government would only scratch the surface of the true problem because of deeper-seated spending issues that aren’t often explained and discussed.
There are two basic types of federal spending. The first is discretionary, which Congress votes to authorize and appropriate each year to fund the functions of government, such as the military and the various agencies. The second type is mandatory or automatic spending, which funds social benefit programs like Social Security, Medicaid and Medicare. This type of spending does not require annual authorization by Congress, but rather continues in perpetuity relying on set rules to determine eligibility. This automatic spending accounts for more than two thirds of all government spending and is by far the largest contributor to the national debt.
So, the funding Congress works all year to allocate only adds up to less than a third of all spending. The rest continues on “auto-pilot,” growing at an unsustainable rate without so much as a vote. To change the way these programs are funded requires actively changing the law.
If current policies remain in place, automatic spending will consume as much as 78 percent of all federal spending in just ten years. That’s because costs for Medicare, Social Security and Medicaid will each nearly double by 2026, according to the non-partisan Congressional Budget Office (CBO).
There are serious consequences to the unrestrained growth of “auto-pilot” programs. First, out-of-control costs jeopardize the long-term solvency of programs people depend on for their health and livelihood. Second, as automatic spending grows its share of the budget, the share of everything else shrinks. That threatens our ability to properly fund other functions of government, from the military to transportation infrastructure to veterans benefits. Finally, uncontrolled growth in automatic spending will continue to add to the already unhealthy national debt. CBO estimates that interest on the debt alone will exceed $5.7 trillion over the next ten years.
What is the solution? Bringing the federal budget into balance will require smart reforms to social benefit programs to control costs combined with significant growth in the economy to generate revenue. Fair and sensible policy reforms such as premium support for Medicare and a pro-growth overhaul of the tax code would be good places to start. In any case, there must be a more robust discussion with the American people about the fiscal calamity we are facing down the road and what can be done to avoid it.