New AFP Report: Looming Debt and Spending Crisis Threatens Standard of Living for All Americans
Arlington, VA – Americans for Prosperity released a new report today warning that a failure to change course on federal spending and debt would threaten the quality of life of all Americans and offering Congress a realistic menu of options to reform mandatory programs in order to get spending under control.
The report, authored by AFP Senior Policy Fellow Alison Acosta Winters and part of AFP’s long-term Securing America’s Future campaign, not only details how inaction will have lasting consequences for all, but also outlines immediate steps Congress can take to fend off this rapidly approaching crisis. These policy proposals address the biggest drivers of the nation’s debt and focus on improving retirement and health outcomes for Social Security, Medicare, Medicaid, and federal savings plans in a way that is affordable for taxpayers and promotes the wellbeing of all Americans.
Securing America’s Future is a multi-year effort to educate Americans about the real consequences of Congress’s failure to restrain spending and will also encourage grassroots activists to urge lawmakers to pursue reforms that will secure America’s future. For too long the incentives in Washington favored policies of reckless and unsustainable spending – this campaign will flip those incentives and show why the only viable path to a brighter future is through fiscal restraint.
AFP Senior Policy Fellow Alison Acosta Winters issued the following statement:
“This fiscal crisis has been decades in the making. But the need for change is urgent – the Medicare hospital trust fund will be depleted in just 7 years and Social Security’s in another 7. Without action no group of Americans, including today’s retirees, will be spared from the budget problems created by decades of ignoring the fiscal reality. Congress must take concrete steps to address the biggest drivers of our spending and debt—Social Security, Medicare, and Medicaid— if they hope to preserve our wellbeing and a bright economic future.”
Russ Latino, AFP vice president of economic opportunity initiatives, issued the following statement:
“We’ve run out of runway to clear this fiscal cliff. Congress failed to course correct when they had the chance, and now we are falling headlong into the economic abyss, despite decades of dire warnings. This brewing fiscal turmoil looms over a surging economy and historically robust jobs market. We’re offering lawmakers realistic options to avoid the disastrous consequences of continued inaction, and we will work with anyone genuinely interested in adopting reforms to safeguard our fiscal and economic future. If we hope to secure a brighter future for all Americans, we must address this problem today with the urgency it deserves.”
Key takeaways on the crisis:
- Federal spending is driving up debt and is imperiling economic growth and prosperity. Without urgent action, the burden from unaffordable spending will fall on everyone from younger Americans to seniors.
- In 2018, the federal government spent over $32,000 for every household in America, taxed $26,000, and put $6,000 on the credit card – which already had a tab of $168,000.
- On top of today’s $22 trillion national debt, the tab for the long-term unfunded promises for Social Security and Medicare benefits is stunning – $56 trillion in net present value terms.
- Addressing the biggest drivers of spending and debt – Social Security, Medicare, and Medicaid which will account for 84 percent of all increases in program spending over the next decade – is paramount to avoid a fiscal crisis.
In the policy analysis, AFP outlines some options for Congress to consider to reform Social Security, Medicare, and Medicaid (click here for the full details on the policy proposals listed below):
SOCIAL SECURITY
- Increase transparency so all Americans better understand the condition of Social Security’s finances, including how much they pay in Social Security taxes.
- Align the eligibility age for benefits with current and future longevity
Medicare
- Gradually bring Medicare eligibility age in line with Social Security
- Prioritize Medicare resources by gradually increasing Medicare premiums and cost sharing on a sliding scale for recipients with higher incomes.
- Improve incentives for seniors to manage their health care costs.
- Move Medicare towards a premium support model that gives seniors more choices
- Allow seniors to opt out of Medicare and still receive Social Security
- Use a more accurate measure of inflation
- Prioritize Social Security resources. Refocusing benefits to protect seniors from poverty would reorient the program to its safety-net roots, while keeping it affordable for taxpayers.
Medicaid
- Preserve Medicaid eligibility for the most vulnerable
- Allow states to design innovative Medicaid programs
Savings
- Broaden health savings accounts so they can be a more effective tool for patients and families to obtain better care.
- Broaden retirement savings accounts so that more Americans save for their retirement and personal needs.
See the full details on these policy proposals and read the full report here.
