Two recent reports draw attention to the issue of generational equity and the burdens that the growing federal debt could place on younger Americans and future generations.
The Congressional Budget Office’s 2013 Long-Term Budget Outlook, released earlier this month, shows that the federal debt — already high by historical standards — will continue to grow even under some optimistic assumptions about future spending restraint.
Interest payments on the debt could rise sharply even as rising entitlement costs put more and more pressure on the federal budget. These trends could place unfair burdens on younger Americans and future generations, making it difficult for them to set their own priorities and deal with future challenges.
A report released last week by The Can Kicks Back (TCKB) — a nonpartisan organization of younger Americans — echoes some of these concerns, warning that delaying deficit reduction will put a greater burden on future generations.
The group’s analysis also said that while average retirees today receive far more in government benefits than they paid in tax contributions, future retirees will be expected to pay in more than they get out.
To combat the growing debt, TCKB proposes a “generationally balanced” grand bargain that increases domestic investment in the short term while reforming entitlement programs and the tax code for the long run.
“While short-term deficits may rise, the long-term fiscal gap would dramatically shrink and our economy would be given a desperately needed boost,” the report concludes. “A ‘Grand Generational Bargain’ may not solve the whole problem in one step, but it could break Washington’s gridlock and make significant progress toward deficit reduction and economic growth.”
Swindled: How the Millennial Will Pay the Price of Washington’s Paralysis (The Can Kicks Back)
CBO’s 2013 Long Term Budget Outlook (CBO)