Five liberal myths about entitlement programs

Myth 1: There is no need to hurry on reform.

The Facts: Entitlement programs are big and getting bigger quickly. Riedl notes that Social Security, Medicare, and Medicaid already absorb 42 percent of the federal budget and are growing by 7 percent annually, making them the largest impediment to balancing the budget. And unless lawmakers act soon, all 77 million baby boomers will have turned 55, leaving future lawmakers with the unpalatable options of massive, economy-stagnating tax increases, unprecedented program terminations, or the paring back of benefits for those over 55. Tackling reforms immediately will reduce their ultimate costs, spread the burden across more people, and give baby boomers more time to adjust their retirement strategies.

Myth 2: These budget projections are unreliable.

The Facts: Incontestable demographics make clear that the retiring baby boomers will drive up entitlement costs. The impending retirement of 77 million baby boomers is not a vague theoretical projection, Riedl argues. As more and more boomers retire, the government will face increased Medicare spending, higher long term care costs and Social Security benefits determined by a specific formula.

Myth 3: Economic growth will solve the problem.

The Facts: Revenues associated with higher economic growth would help only marginally, Riedl explains. In addition, because entitlement costs are tied to economic indicators like income, the same factors that could increase tax revenues would also increase spending.

Myth 4: Cutting government waste and pork is enough.

The Facts: Cutting waste alone will not cover the massive new spending on entitlements. In fact, Riedl writes, offsetting this spending hike would require eliminating every other federal program by 2049 except interest payments on the federal debt. Non-defense programs would be eliminated by 2030, and defense spending would be eliminated by 2049.

Myth 5: Letting the 2001 and 2003 tax cuts expire will solve the problem.

The Facts: Losing the tax cuts would close less than 1 percentage point of the 10.2 percent gap between current and future entitlement costs. And that projection from the Congressional Budget office doesn't take into account the likely economic consequences of such a tax increase.