In just a few decades, Social Security, Medicare and Medicaid, other mandatory spending programs, and paying interest due on the debt will eclipse our entire budget.
Kurt Schrader on Thursday, February 2nd, 2012 in congressional website
Will entitlement programs and debt swamp federal revenues in the near future?
Members of Congress and politicians like to use dramatic language to describe the nation’s fiscal problems. Federal spending, they say, is like "a runaway train." The GOP’s front-runner for president, Mitt Romney, famously said, "We’re inches away from no longer having a free economy."
The rhetoric on the nation’s deficit is similar. "A government that loses its sovereignty to its bondholders cannot long guarantee its people’s prosperity – or secure their freedom," the budget written last year by House Republicans said.
Oregon Rep. Kurt Schrader, a Democrat, is a bit more restrained, though his prediction is equally grim.
"In just a few decades, Social Security, Medicare and Medicaid, other mandatory spending programs, and paying interest due on the debt will eclipse our entire budget,’’ he says on his congressional website.
"There will be NO money left for defense, Pell Grants, support for K-12 education, police and firefighters, economic development, transportation infrastructure, and everything else which creates and sustains a country for our children," he says in words meant to envision a fiscal nuclear winter.
It is grim and dark to be sure.
But is it true?
To answer it, we have to narrow the discussion. Schrader’s assertion that there will be "NO money left" for popular programs dealing with education, public safety and infrastructure is impossible to answer because Congress has broad discretion for appropriating dollars to those activities -- or raising taxes to pay for them. And even amid desperate fiscal meltdowns Congress has excelled at finding ways to pay for popular programs.
So let’s examine the first part of Schrader’s claim - that in a relatively short time, the cost of the big entitlement programs - Social Security, Medicare and Medicaid - and interest payments on the national debt will "eclipse our entire budget."
If you take the statement at its literal meaning, it is false. Social Security, Medicare, Medicaid and interest are always part of the annual budget. Just like rent or mortgage, groceries and credit card debt are always part of a household budget. The spending can never eclipse the budget because the items are always contained within the total budget.
Schrader’s staff says the language is imprecise but the meaning isn’t - that entitlements and debt will swamp federal revenues in the near future.
It’s one of those, "It’s not what we say, it’s what we mean" moments.
Taken that way there is a lot of data to support the idea. In fact, independent budget analysts using federal data say Schrader is being generous.
According to budget simulations run by the Government Accountability Office, the total cost of Social Security, Medicare, Medicaid and debt service would exceed total revenues in 2026 for the first time in history.
The fiscal year 2012 budget released last year by the Republican-controlled House Budget Committee said this: "In 1970, these major entitlements consumed about 20 percent of the budget – a number that has grown to over 40 percent today. Unless action is taken to reform these programs, they will continue to crowd out all other national priorities until they break the federal budget."
Other government reports look at individual pieces. But together they reach the same conclusion.
The Congressional Budget Office, for example, noted similar concerns in a long-term outlook released in June. The federal debt is growing, reaching 62 percent of gross domestic product at the end of 2010.
The non-partisan budget office noted similar growth trends for Medicare, Medicaid and Social Security, concluding "the total amount of benefits scheduled to be paid under current law will grow faster than the economy."
The numbers are clear as are the trends. With the explosive growth in entitlements and the government’s need to borrow more to keep pace, there is little doubt that the lines will cross soon on the graph of revenues versus spending. The only question is when.
To rule, we need to decide first if the distinction between "the budget" that Schrader referred to and total revenues, which includes the debt and all the entitlement programs, is a difference that matters. We think that, while his language could have been more precise, the average person would understand what he was talking about. Context matters in PolitiFact rulings, and in context, his remarks make his meaning clear.
On the math, Schrader’s estimate of "a few decades" is very reasonable, under present circumstances. For that reason we rate this claim: True.