The Future of Entitlements

A novel idea for an old problem: Force politicians to stop ducking.

THE FEDERAL budget is on an autopilot course to ruin. Spending on the three big entitlement programs -- Social Security, Medicare and Medicaid -- grows automatically, consuming a large and growing share of the budget with benefits that flow mostly to the elderly. Meantime, there is almost no public discussion about the trade-offs involved: Would the money be better spent on education, homeland security, defense or infrastructure? Even before the baby boomers retire, more than four dollars out of every ten go to these programs; if health-care spending increases at the current rate, within 40 years Medicare and Medicaid alone will amount to as large a share of the economy as the entire federal budget comprises today.

Absent intervention, the country faces three unpalatable scenarios: running dangerously high deficits, squeezing spending on other vital needs or raising taxes to levels that could threaten economic growth.

Meanwhile, the easy-sounding fixes peddled by right and left are not going to solve the problem. Eliminating government waste, growing the economy, getting health-care costs under control, rolling back some or even all of the Bush tax cuts -- all of these are important elements of a solution, but the unpleasant fact is that the country has promised more than it is going to be able to deliver. No wonder you're not hearing much about this from the presidential candidates.

Last week an impressive and ideologically diverse collection of economists and budget experts proposed an intriguing mechanism for forcing lawmakers -- and the next president -- to focus on the problem. The group, whose members come from think tanks ranging from the Brookings Institution and the Urban Institute to the Heritage Foundation and the American Enterprise Institute, would take Social Security, Medicare and Medicaid off autopilot growth and require lawmakers to set 30-year budgets. These would be reviewed every five years to determine whether the costs are set to remain within the allotted limits. If not, there would be automatic adjustments -- the experts' paper doesn't specify what those would be -- unless lawmakers acted to override this trigger.

This is not, and was not intended to be, a solution to the problem of runaway entitlement spending. The group, not surprisingly given its ideological scope, does not offer answers to the toughest questions: What should the spending levels be? What benefits should be cut, taxes raised or provider payments reduced? Rather, the paper offers a mechanism to force Congress and the president to face up to these difficult policy choices. There are legitimate worries about whether this mechanism would function as intended. Tax breaks, too, are on an automatic course; why not require that they be revisited as well? Would the trigger mechanism really work -- or would lawmakers just vote to waive the limits ?

These and other questions are worth debating with the serious people (they include three former Congressional Budget Office directors, two Democrats and one Republican) who worked for nearly two years on the proposal. As one of them, Alice M. Rivlin, said when the proposal was unveiled, "We're hoping to start a conversation. If you don't like our proposal, tell us what you think should be done -- because continuing the status quo is simply not an option."