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A CALL FOR GENERATIONAL PATRIOTISM
“We must all be soldiers
¾ every one of us. Our men and women in the
armed forces demonstrate their love of country by facing possible death. We
must be prepared to love our country as well in our everyday deeds and our
everyday commitments.”
Much has changed in the past year. The events of September 11, 2001 shocked the conscience of the civilized world, inspired a surge of patriotism among Americans and alerted us that we must be better prepared to deal with homeland security threats.
Meanwhile, the huge 10-year budget surpluses that were forecast just a year ago have been reduced by roughly two-thirds due to an economic recession, a large escalating tax cut, and the need to increase spending for the war against terrorism at home and abroad. The non-Social Security portion of the surplus is gone. For the time being, we are back to using the Social Security surplus to cover non-Social Security expenses. And instead of debating whether the publicly held debt would be paid off too fast, as some were warning last year, Congress will begin the year by debating how soon the debt limit must be increased and by how much.
Yet despite the major events and rapid fiscal changes of the “new environment,” two things remain depressingly consistent ¾ the huge unfunded retirement and health care costs of the coming senior boom and, with rare exceptions, the unwillingness of political leaders to do anything about it.
Seven years ago a Presidential Commission chaired by Senators Bob Kerrey (D-NE) and Jack Danforth (R-MO) concluded that our system of federal entitlement programs was on an unsustainable course. Nearly everyone agreed, but no action was taken. In 1998 President Clinton called for a national year of discussion on Social Security to be followed by legislative action in 1999. The discussion was useful, and for a time the “third rail of American politics” was safe to touch. But in 1999 no action was taken.
A bipartisan Medicare commission was appointed in 1998, but because it was not able to produce a plan with the supermajority vote required, no formal recommendation was forwarded to the President and Congress.
During the presidential campaign of 2000 both major party candidates acknowledged the long-term financing gap and insisted that they wanted to save Social Security and Medicare. But neither candidate proposed anything that would require anyone to give anything up. Calling for long-term sacrifice in a time of short-term surpluses was not on the agenda in the 2000 elections for any purpose.
In 2001, President Bush appointed a new bipartisan Social Security commission, which, at his request, did not produce a recommendation but instead came back with three illustrative models for adding personal accounts to the system. But two of the plans contain explicit provisions to improve the fiscal sustainability of the program, which personal accounts alone do not. Even though these provisions were designed to avoid any impact on current beneficiaries, political leaders of both parties reacted with horror. The President has called for a year of discussion. It seems that we've been here before.
As for Medicare, which has even greater long-term problems than Social Security, the disappearing budget surplus has deprived politicians of the easy option to add a prescription drug benefit out of general revenues while leaving the hard questions about structural reform for another day. No action is expected on Medicare reform this year.
All of this leaves us with a fiscal policy that is still unsustainable over the long-term, despite an unprecedented 10-year economic expansion. The surpluses and debt reduction that occurred during the later stages of the boom were a welcome change from 30 years of chronic deficits and they added critical national savings for the long-term growth of the economy. But debt reduction alone was never a complete strategy for dealing with the long-term challenge. And now, even that option is on hold, if not gone.
The Do Nothing Plan
With the long expansion over, the surpluses gone for now, and the entitlement financing gap as large as ever, is there a plan for dealing with the long-term challenge?
Yes, there is. It's called the Do Nothing Plan and almost every member of Congress has endorsed it. The details of the Do Nothing Plan can be found in the annual reports of the Social Security and Medicare trustees. Details can also be found in various reports by the General Accounting Office, the Congressional Budget Office, the Congressional Research Service, and the Social Security Advisory Board.
In the Social Security Do Nothing Plan, benefit payments begin to exceed dedicated tax revenues by 2016. Between 2016 and 2038 the U.S. Treasury will have to come up with nearly $5 trillion in today's dollars to redeem the bonds now accumulating in the trust funds. This need will, of course, put a strain on the rest of the budget, including Medicare, which will also be paying out substantially more than it takes in from dedicated sources. Then, in 2038, the Do Nothing Plan cuts everyone's benefits across-the-board by 27 percent.
More broadly, the Do Nothing Plan means a legacy of unsustainable debt, crushing taxes, or broken promises. In August, even before the full impact of the recession and the response to September 11 had been taken into account, a long-term simulation by the General Accounting Office (GAO) ¾ which assumes the elimination of budget surpluses through unspecified policy actions ¾ showed that on our current course Social Security, Medicare, Medicaid and net interest payments would consume all federal revenues by 2030. That is not a legacy any of us wants to leave behind. The Do Nothing Plan must be rejected.
Unfortunately, political leaders of both parties remain in denial. Too many Democrats minimize the enormous challenges facing the current system. Too many Republicans assume that these challenges can be met by simply creating personally owned retirement accounts. Real solutions, as opposed to temporary procedural fixes like the Social Security lockbox, cannot happen until each side abandons its free lunch competition and faces up to the hard choices.
Absent change, Social Security and other senior entitlement programs will consume an ever-larger share of the budget and the economy as the baby boomers retire and Americans live longer lives. These benefit programs are a vital part of the nation's retirement security fabric. But they cannot grow faster than the economy forever. This fundamental issue must be addressed. It is our duty to future generations.
Generational Patriotism
The symbol of The Concord Coalition is an American minuteman, a patriot, standing watch over a small child. The symbol embodies our belief that patriotism means more than love of one's country today. It also means concern for the future of one's country and the well-being of those who will live in it. By “generational patriotism” we mean honoring in deeds and commitments the duty to create for the next generation a better, stronger, more prosperous nation.
We believe there is a clear need for generational patriotism in our public policies. And, contrary to current conventional wisdom, we believe that now, in the “new environment,” is exactly the right time to take up such critical issues as Social Security and Medicare reform.
Patriotism has surged in the months since terrorists attacked our nation on September 11, 2001. Public reaction to that new day of infamy has demonstrated again the inherent desire and ability of the American people to rally together in pursuit of a common purpose. The worst of times brings out the best in Americans.
We have all been reminded of what it means to be part of a community, and we are determined to do what it takes to right a horrible wrong. It is more than a matter of self-interest. It is a matter of common interest. We now know that we must act to secure our nation's future. That is the essence of patriotism.
As a result of September 11, no one can doubt the need to improve our security at home and abroad. A bipartisan consensus has quickly emerged to provide additional resources to the military and increase our homeland security on everything from airports and seaports, to bioterrorism preparedness, to border patrols.
But even as the events of September 11 have tapped into a wellspring of patriotism, they also serve as a searing reminder of what can happen when known dangers are ignored either because it seems inconvenient to deal with them or because we simply assume that terrible things can never happen here.
The lessons of September 11 have important implications for the long-term fiscal challenges that loom just beyond the arbitrary 10-year budget window. Known dangers should be acknowledged in advance of a crisis and dealt with in a straightforward manner. By all means, we should debate the options and trade-offs. But we must act. If, as so many nonpartisan government agencies and bipartisan Presidential commissions have warned, current law is unsustainable then we must change the law.
At the same time, the renewed sense of patriotism, so manifestly in evidence, can be drawn upon to inspire a bipartisan commitment to protect not just the physical security of today but also the economic security of tomorrow. There will be no terrorist attack on Social Security and Medicare to create a sense of crisis. It is a crisis in slow motion. But the threat is real, and so too is the desire of Americans to secure the economic well-being of their children and grandchildren.
As Paul Tsongas said, “The bond between parent and child is nature's strongest. Providing for the well-being of the young is how every generation of Americans undertook their stewardship.”
We believe that many of today's leaders have drawn precisely the wrong conclusion about how the events of September 11 should impact the legislative agenda. The message we hear from the White House and Capitol Hill, from Democrats and Republicans alike, is that hard choices about the long-term must be put on hold. They say, “It's not the right time to deal with these issues. We're in a recession. It's an election year. We're engaged in a military struggle.”
These excuses for inaction are loud and clear and wrong. There is never a convenient time to do difficult things and there is never an excuse for failing to do the right thing. The choices we make now will determine what kind of America our children and grandchildren inherit 20 and 30 years from now. With the first of the 76 million Baby Boomers beginning to collect Social Security benefits in just 6 years, the window of opportunity to counteract the generationally inequitable consequences of the Do Nothing Plan is rapidly slamming shut. The time to act as generational patriots is now.
The Concord Coalition, January 14, 2002
