“FOR MY final address to this chamber, I don’t want to just talk about next year. I want to focus on the next five years, the next 10 years, and beyond. I want to focus on our future.” With those words, President Obama announced that last Tuesday’s State of the Union speech would be different: not the usual list of legislative New Year’s resolutions but a long-range look at structural challenges facing a rapidly changing nation. He mentioned several, including climate change, political reform and income inequality. Conspicuously absent from the president’s message, though, was an issue so vital, and so unavoidable, that the president could have devoted the entire evening to it.
We refer to the aging of the American population and the attendant need to support tens of millions of retirees in the coming decades without neglecting other pressing social needs. The demographics are inexorable: In 2050, the over-65 population is projected to be 83.7 million, up from 43.1 million in 2012, according to a 2014 Census Bureau report . Seniors will account for 1 of every 5 Americans in 2050, up from roughly 1 in 7 in 2012. The implication is clear: A larger, older cohort will depend on a smaller, working-age cohort. Payroll taxes fund Social Security and Medicare; yet the Congressional Budget Office forecast last year that the ratio of workers to retirees will decline from 3-to- 1 to 2-to- 1 between now and 2040.
Thanks in part to immigration, the U.S. population is still growing, so the country is in better shape than other rapidly aging advanced industrial countries, such as Japan, where the population is shrinking. Relatively modest reforms to entitlement programs for retirees could put them on a sound financial footing, with money left over to fund education, health care and other needs of young people. During the Obama years, however, the president episodically tackled entitlement reform only to see compromise fail over tax increases, which he favored and Republicans opposed. In the end, some tweaks — a fix to Medicare’s annual spending growth formula and new rules for Social Security disability insurance — have been enacted. But we are left with a problem that, while still manageable, becomes less so with each passing year.
In neglecting these truths during his speech, Mr. Obama was no different from most of the Republican candidates who would succeed him, or, indeed, the Democrats. Still, we hold him to a higher standard, for two reasons. First, he pledged, shortly before taking office, that “we have to signal seriousness” on entitlements “by making sure some of the hard decisions are made under my watch, not someone else’s.” Second, in a speech billed as both a valedictory of sorts and a broad look at the future, he owed the public more.
As a progressive Democrat, Mr. Obama was as well-positioned to issue a final admonition on entitlements as President Eisenhower, the former general, was to warn against the “military-industrial complex” in his 1961 farewell speech. So far, opportunity missed.