LeRoy Collins Commentary 51

Commentary #51
1 June 2007

Fiscal Wake-up Call

In early May 2007, I received a personal invitation from Senator Mel Martinez, through my Florida Department of Veterans' Affairs office, "to attend and participate in a substantial discussion on the state of our nation's long term fiscal policy" at the University of South Florida on 30 May. But this sentence in his second paragraph REALLY piqued my interest: "At the current expansion rate, federal entitlement programs are unsustainable...."

I thought this could wind up being a debate, and I wanted to ensure the interests of Veterans were protected since the current expenditures on the U.S. Department of Veterans' Affairs now exceeds $70 billion/year, and increasing, like Social Security, Medicare, Medicade... So, I accepted.

Upon arrival at the Alumni House venue for the meeting, I surveyed a mixture of media, students, small special interest groups (like me), a distinguished panel from out of town (including U.S. Comptroller General, David Walker), plus Senator Martinez and Congressman Adam Putnam, our host USF President Judy Genshaft, and our MC, Distinguished Professor of Political Science Dr. Susan McManus.

While grazing the hors d'ouvres beforehand, I got into a conversation with Tampa Tribune political writer, Wendy Marsh, who expressed some surprise when I stated that among my favorite parts of my U.S. Senate campaign last year were my jousts with editorial boards of Florida newspapers, because they were typically well-informed. Among my greatest disappointments were refusals of interviews by the media when I was standing at their front door (one editor in central Florida sent word to me he was interested only in local races). Back to the panel...

Senator Martinez did the kickoff remarks to the approx 100 in the room saying the nation is coming upon a "financial predicament," and not because of a lack of attention. He said early in his first term (i.e. within the past two years), he was advised not to touch this subject, but now, he said, WE MUST.

At this point Dr. McManus introduced the panel for their respective presentations:

1.  Robert L. Bixby, Executive Director of the bi-partisan Concord Coalition told us Social Security, Medicare & Medicaid spending now exceeds over $1.05 trillion/yr (40% of the Federal budget); 13% of Americans are over 65, drawing Social Security, Medicare/Medicaid benefits, and swelling to 20% within the next 30 years; healthcare costs are rising faster than the nation's economy; the Federal outlays exceed its revenue by $250 billion and continuing; our leaders in Washington know there is a problem, but are reluctant to engage it unless their constituents demand it. FISCAL ACCOUNTABILITY IS NOW A MORAL ISSUE.

2.  Hon. David Walker, U.S. Comptroller General, said the alarm was sounded long ago, so it is not about numbers. It is now about PEOPLE and their VALUES. He cited some examples of sensitivity analyses i.e. cut-here-and-it-responds-there, which I wish he had distributed to us, the attendees. Those age 60+ today may avoid most of the pain, but those younger are likely to have rough times ahead...even if we fix it now.

3.  Jason Furman, Senior Fellow of the Brookings Institution, explained the key problems: deficits reduce our nation's saving (the lowest now as a % of GDP since the 1930s), and lower saving reduces our future standard of living (because we must borrow from foreigners and investment $ go overseas), so now we can produce less, wages go down, and our workers become less productive; today we spend 赨 billion for Interest on the debt (twice what we spend on education); the wait to fix simply intensifies the pain of realization in the future.

4.  Alison Fraser, The Heritage Foundation, had an interactive graph of Total Federal Spending and Tax Revenue as a % of GDP extended from 1975 to 2050. She was able to interactively vary the graph's input of Social Security, Medicare, Medicaid, National Defense, Net Interest (and others) to show what happens to the Federal Budget in the out years...not much. Conclusions: CURTAIL RETIREMENT ENTITLEMENTS! The obvious targets for reform are the Medicare drug plan, raising the retirement age, means testing for receiving Medicare/Social Security benefits, transform entitlements into 30-yr budgeted programs, and measured implementation.

Now you start to see why the Congress is afraid to go there; our senior citizens have the most at stake, AND they have the best record of participation in elections.

In the Q & A session afterwards, most of the questions were softballs. I tried to mix it up by asking what is the impact of illegal immigrants on this fiscal dilemma. Surprisingly, most of the panelists discounted their impact, saying that most of them were working hard while paying Social Security taxes to fund those receiving Social Security benefits. That seemed na´ve to me since they seem to be ignoring the unfunded loads which illegal immigrants put on the public school systems, our increased crime involving illegal aliens, the burdened charity healthcare loads in hospitals, and the bad example of ignoring our nation's laws.

The bottom line is: the day of reckoning is now upon us. We cannot allow our Congress to continue sweeping our deficit economy under the rug and out of sight. If any of us cannot become an advocate for responsible remedial action with America's fiscal policy, WE are significant parts of the problem. Overlay these internal problems with the external fact there are 100 million people in this world who want to kill Americans, so you can appreciate the vexing challenges of SURVIVAL in our future.

While Veterans were never mentioned in these discussions, I came away realizing why I was invited. Veterans have their own entitlements they want to protect, and that is a major part of my current job as Executive Director of the Florida Department of Veterans' Affairs.

/s/ LeRoy Collins, www.leroycollins.org


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