Social Security, Medicare and a $56.4 Trillion Budget Hole

Tuesday, February 24, 2009

In his Feb. 23 op-ed, "The Deficit Hawks' Attack on Our Entitlements," Robert Kuttner accused Peter G. Peterson and the foundation he created, as well as centrist Democrats in Congress, of attacking Social Security and Medicare in light of current deficits. To be clear, the Peterson Foundation believes that Social Security and Medicare need to be made sustainable and has never advocated that these programs be "perversely cut," as Mr. Kuttner stated.

As of Sept. 30, the federal government carried $56.4 trillion in liabilities and other commitments. Although challenged by Mr. Kuttner, this total is based on the official consolidated financial statements of the U.S. government. It accounts for not only our public debt but also our unfinanced Medicare and Social Security commitments to future beneficiaries. The figures for these programs are based on the Social Security and Medicare trustees' "best estimate" assumptions, which, contrary to Mr. Kuttner's assertions, have proved to be more optimistic than reality has shown. The $56.4 trillion figure also does not include Medicaid.

With some relatively minor reforms, Social Security can become a stronger safety net, but shoring up Medicare and reining in health-care costs pose far more complicated challenges. Confronting these challenges piecemeal is a recipe for failure, as they require comprehensive reforms -- including spending cuts, tax increases and improved efficiencies in health care -- that will be politically difficult to pass one by one. That's why we need a bipartisan commission of lawmakers and independent experts who can engage the public and offer recommendations that are guaranteed a vote on Capitol Hill.

Mr. Peterson and his foundation are dedicated to improving the outlook for young Americans at a time when parents are increasingly skeptical that their children face better futures than they do. Mr. Kuttner is entitled to his opinions -- but he should base his arguments on facts, not false assertions and "creative accounting."


President and CEO

Peter G. Peterson Foundation

New York

The writer was U.S. comptroller general from 1998 to 2008.

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