Article published April 01, 2008
The coming crunch
WITH the presidential candidates busy making expensive promises to voters, a distinguished, bipartisan group of economic experts is traveling the country bearing news that nobody wants to hear: The nation cannot continue on its current fiscal course.
We believe this warning should be taken very seriously, given the impressive credentials of those making the plea - experts like David Walker, the respected former U.S. comptroller general; Alice Rivlin, a senior fellow at the Brookings Institution, who was the first director of the Congressional Budget Office, and Brian Riedl, a senior policy analyst at the Heritage Foundation.
Their tour is on behalf of the Concord Coalition, a group founded in the early 1990s by former Sens. Warren Rudman (R., N.H.) and Paul Tsongas (D., Mass.) to preach the gospel of responsible fiscal policy.
They call their itinerary the "Fiscal Wake-Up Tour," but it could just as well be the "Pigeons Coming Home to Roost Tour." That's because, when the fiscal crunch comes, it will be loud and dirty and feathers will fly.
Worried about taxes? If entitlement programs keep swelling federal programs, higher taxes may be inevitable as part of a bailout. Worried about Social Security? Unless steps are taken to correct course, the nation won't be able to afford to keep all its promises to the people.
Bill Clinton's 1992 presidential campaign kept its focus with the saying "It's the economy, stupid." Today, presidential candidates would do well to remember a threat just as real: "It's the demographics, stupid." As the coalition members tell it, the coming fiscal crisis is advancing in a relentless march of aging Americans overwhelming entitlement programs, health-care costs, and federal budget deficits.Over the next 25 years, they point out, the number of Americans aged 65 and up will almost double, from 12 percent of the population to 20 percent. With the working-age sector growing by only 10 percent, the ratio of workers paying into Social Security and Medicare relative to those getting benefits will fall by roughly one-third. The numbers, in short, don't add up - except to spell big trouble. Already Medicare and Medicaid together comprise 42 percent of the federal budget.
Unless something is done, federal deficits will soar and the nation's permanently rising debt will eventually crush the economy.
But what to do? Coming to the challenge with different political opinions and representing a nonpartisan organization, the members of the Fiscal Wake-Up Tour don't advocate one solution over another. They are Paul Revere on a ride to wake up the citizens to the advancing enemy.
They want the presidential candidates to speak to these issues, which they won't be able to ignore once one of them is in the White House.
Unfortunately, tour participants say that none of the candidates is truly speaking about the coming crunch, except in a piecemeal fashion.
The coalition does have a series of questions to ask the candidates, including this one: "Do you support imposing strong budget controls, such as caps on annual spending, a 'pay-as-you-go' rule for new spending and tax initiatives, and/or putting today's entitlements on a firm, long-term budget?"
It's a good question. In this season of big promises, the American people should insist on a good answer.
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