Federal spending favors the elderly. It has been this way for decades due to Medicare and Social Security receiving the lion’s share of the federal budget. But as health care, Social Security, and interest on the national debt rises, the youth of the nation are being boxed out of future prosperity.
“Less than one-tenth of federal spending and support went to children in 2016,” according to a recent report, which mostly comes in the form of health spending or tax breaks. The other federal spending goes to Medicare, Medicaid, and Social Security (46 percent), defense (15 percent), other non-defense priorities (23 percent), and interest payments on the national debt (6 percent).
The Committee for a Responsible Federal Budget (CRFB) predicts spending on children will rapidly decrease as these programs and recent policy trends swallow up the federal government’s resources. “By our estimates, spending on children will decline from 9.8 percent of the budget in 2016 to 9.2 percent in 2019 and 7.4 percent in 2028.”
What’s particularly noteworthy, is that in just two short years, interest costs to service our debt will exceed spending on children, costing almost $450 billion in 2020. Further, interest costs, save for entitlement and benefit programs, are expected to be the largest budget item in 2024, costing $800 billion. In practical terms, this means future generations will be forced to pay taxes for the overspending committed by current and past generations, rather than investments in our nation’s children, infrastructure, research, or education.
This is part of a greater trend in U.S. spending. The biggest debt drivers are our entitlement programs, and this year, for the first time since 1982, Social Security payments will exceed its income and returns, dipping into its $3 trillion trust fund. Cost of the Medicare and Social Security will continue to rise as health costs rise and baby boomers retire. According to a new report, the federal share of health spending is now close to 50%, accelerated by the baby boomer generation who’s 10,000 retirees per day will “more than double Medicare and Medicaid costs by 2020.” In addition, Social Security’s Board of Trustees predict that by 2034, the program will only be able to pay out about three-quarters worth of benefits. Medicare’s hospital insurance fund will be depleted in 2026.
All roads lead to one conclusion – Congress must fix our runaway programs in order to save future generations from further economic turmoil. It is still possible to put these programs on a sustainable path, but the longer Congress waits, the more the burden falls on the next generation.
Unfortunately, Congress has waited too long for reforms to have no effect on current or future generations, so like most great American endeavors, we will have to work together. So the next time you hear a Congressman or Senator talking about entitlement reform, don’t be hasty to condemn, think of the children.
