Our nation's expanding generosity and its contracting economy are on a collision course.
We have developed over the past 50 years social programs that our economy can no longer afford. Our dreams are out of the '60s, when America was doubling its wealth every 30 years. Now we live in a time where it is taking us more than 100 years to double our wealth. Our reach for social justice exceeds our economic grasp.We are a compassionate and caring people. We look around us and we see poor people who need social programs, handicapped people who need a "barrier free" society, developmentally disabled children who need to develop their talents as best they can. "Need" alone once justified a response - how could anyone vote against a worthy program to help a group in need?
But a society cannot distribute what the society doesn't earn. My early political career was dominated by a social agenda, and while our nation's social programs weren't perfect in execution, the goals were worthy. America in the 1960s was an incredible wealth-creating machine, and I had no compunction in dividing a growing pie even if it meant raising taxes. A just society does not ignore those in need.
The new economic world we face will require us to better focus our programs. We no longer are rich enough to be indiscriminately generous. We have enough to meet basic needs, but we must do so thoughtfully and effectively. We must think through more precisely whom we want to help and how.
One alternative to this unpleasant task of cutting back on benefits remains unexplored. We can, of course, cut the defense budget. Today's Democrats promise endless new programs by "cutting the defense budget."
Truly, the defense budget can be cut. Our military competitors are in disarray and seek to end the arms race so they can revitalize their economies. The United States must inevitably cut back on its military spending also.
But "cutting defense" alone will not allow us the bonus some hope for. Aside from the fact that any money saved on defense spending should be used to eliminate our large federal deficits, we also find that our social programs are growing so fast that they alone will eat up any savings on the defense budget.
Look at only one of those programs: Medicare. It is growing at an unsustainable rate:
(in billions of dollars)
'89 '90 Inc. Inc.
Medicare-Medicaid $133 $153 15 $20
Defense $296 $305 3 $9
Social Security $231 $247 7 $16
Interest on debt $169 $182 8 $13
Everything else $309 $322 4 $13
TOTAL $1138 $1209 6 $71
The past rate of growth of Medicare alone will equal the entire defense budget in 15 years. Seven years later, Medicare will be larger than the defense budget and Social Security combined.
We have no alternative but to trim back our existing social programs. It can be done justly.