Speaker: Economic Growth No Solution to Fiscal Woes

Published Oct 11, 2010. By Doug Walker.
Interest on the nation’s debt costs Americans more than $207 billion annually. Addressing the Rome Kiwanis Club Monday, Phil Smith — national political director for the Concord Coalition — wondered how that figure would rise when interest rates return to traditional levels at some point in the future.The Concord Coalition is a nonpartisan grassroots organization founded in 1992 by former Democratic Sen. Paul Tsongas, former Republican Sen. Warren Rudman and former Secretary of Commerce Peter Peterson.Smith, who is based in Atlanta, said a combination of aging demographics coupled with health care costs that are rising two and a half times faster than the economy are a big part of what’s driving the fiscal challenges facing the nation.In 1960, 5.1 workers were paying into Social Security for every person who was collecting benefits. Today, that ratio has fallen to 3 to 1 and by 2029 the ratio of payers to recipients is expected to be 2.2 to 1. “You can’t ratio shift like this and do nothing about it,” Smith said. “We’re becoming a nation of Floridas.”Smith said Americans have not heard the end of health care reform issues, and suggested that at some point in the not-too-distant future, math will trump the politics of the debate. Mandatory federal spending programs, including interest on the debt, now account for 55 percent of the federal budget, up from 31 percent 40 years ago. Mandatory programs include Social Security, Medicare, Medicaid, federal retirement and unemployment programs along with several social programs including food stamps, support to families and child nutrition programs.“Social Security, Medicare, Medicaid and interest on the debt will consume all federal revenues within the next 20 years,” Smith told the civic group. “That leaves no money for defense, that leaves no money for tax cuts, that leaves no money for transportation, whatever it is that you want from your federal government.” Smith said the debate during fiscal responsibility is not just about numbers; he argued it is a moral issue impacting future generations.