Commentary in OK Economic Report: The case for entitlement reform
Oklahoma Economic Report - Congressman Tom Cole
Perhaps the most daunting issue that we face as Americans is the massive amount of public debt that exists and the rate at which it is growing. Certainly, the staggering number of nearly $18.4 trillion calls for real solutions to change the debt trajectory. In an effort to return our nation to fiscally-firm footing, it’s important to consider how we reached this point while also recognizing the areas where we’ve been successful.
As Americans are well aware, debt is accumulated when spending outweighs the incoming revenue. If debt is allowed to grow because spending behavior is not addressed, it leads to an economically unsustainable situation and the solutions obviously become much more challenging. In order to change the debt trajectory, it requires that we uncover what’s driving it upwards.
Based on the nation’s massive and climbing debt, it would certainly seem that nothing has been done to correct it. However, I would argue that not enough of the right solutions have been proposed and implemented—solutions that address what’s actually driving our debt.
Federal spending falls into three general categories: discretionary, mandatory and interest. During the annual budgeting and appropriations process, lawmakers set the discretionary side of spending by writing a budget and then passing appropriations bills to fund various areas of government. As a member of the U.S. House of Representatives, I sit on both committees that are directly involved in this process – Budget and Appropriations.
The problem is that mandatory spending is by far the largest category, and it’s essentially left to its own devices unless and until lawmakers push for and agree on reforms. Because this category is made up of entitlement programs like Social Security, Medicare and Medicaid that require the government to automatically pay out benefits to Americans, it is not part of the annual appropriations process—where real cuts to discretionary spending have taken place each fiscal year since Republicans were given control of the House of Representatives in the 2010 election. In 1970, discretionary spending made up approximately 62 percent of total spending with only 31 percent spent on mandatory. Those proportions have shifted dramatically. Last year, mandatory spending made up approximately 60 percent and discretionary only accounted for 33 percent. Whereas tough decisions have been made to rein in discretionary spending, mandatory spending is growing at an alarming rate. It’s an economic reality that cannot be ignored.
While I wish I could report that we have solved the crisis and averted the imminent bankruptcy of our nation’s entitlement programs, I want to assure you that conversations are taking place on both sides of the aisle. As a part of the “Doc Fix” legislation we passed earlier this year, Republicans and Democrats both agreed on some small reforms so that seniors who earn more than $133,000 of income (or couples earning more than $266,000) pay a little more for their benefits. In addition, the Budget Conference Report included language urging Congress and the president to work together to find solutions, and the House Budget Committee has started an initiative meant to encourage discussion on worthwhile reforms to programs like Social Security, Medicare and Medicaid.
One effort of which I am particularly hopeful is a bipartisan piece of legislation that I helped introduce in the previous and current Congresses to save Social Security. In March of this year, I joined with my Democrat House colleague John Delaney to reintroduce a bill that calls for a bicameral and bipartisan commission to discuss and propose solutions for long-term Social Security solvency. Once proposed, Congress would be required to have an up or down vote on the commission’s proposal. Forcing Congress to act would be a good start to solving our problem.
Given the evidence that mandatory spending is clearly driving our debt, I believe it to be of paramount importance that lawmakers work together to prioritize entitlement reform. I remain hopeful that we can and will.
Online: Oklahoma Economic Report