Reject the Welfare/Warfare State

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Reject the Welfare/Warfare State
        
Last week’s midterm elections have been characterized as a victory for 
grassroots Americans who are fed up with Washington and the political status 
quo.  In particular, the elections are being touted as a clear indicator that 
voters demand reductions in federal spending, deficits, and debt.

If the new Congress hopes to live up to the expectations of Tea Party voters, 
however, it faces some daunting choices.  For all the talk about pork and 
waste, the truth is that Congress cannot fix the budget and get our national 
debt under control by trimming fat and eliminating earmarks for “Bridges to 
Nowhere.”  

Real reductions in federal spending can be achieved only by getting to the 
meat of the federal budget, meaning expenditures in all areas.  The annual 
budget soon will be $5 trillion unless Congress takes serious steps to reduce 
spending for entitlements, military, and debt service. Yet how many Tea Party 
candidates who campaigned on a platform of spending cuts talked about Social 
Security, Medicare, foreign wars, or bond debt?

With regard to entitlements, the 2010 Social Security and Medicare Trustees 
report tells it all.  It paints a stark picture of two entitlement programs 
that cannot be sustained under even the rosiest scenarios of economic 
growth.  No one, regardless of political stripe, can deny the fundamental 
problem of unfunded future liabilities in both programs.

We should understand that Social Security was intended primarily to prevent 
old widows from becoming destitute.  Life expectancy in 1935 was only about 
65, when there were several workers for each Social Security recipient.  The 
program was never intended to be a general transfer payment from young 
workers to older retirees, regardless of those retirees’ financial need.  Yet 
today Social Security faces an unfunded liability of approximately $18 
trillion.  

First, Congress needs to stop using payroll taxes for purposes not related to 
Social Security, which was a trick the Clinton administration used to claim 
balanced budgets. Second, Congress should eliminate unconstitutional 
spending -  including unnecessary overseas commitments - and use the saved 
funds to help transition to a Social Security system that is completely 
voluntary.  At some point in the near future Congress must allow taxpayers to 
opt out of federal payroll taxes in exchange for never receiving Social 
Security benefits. 

Medicare similarly faces a shortfall of $30.8 trillion in unfunded future 
benefits.  The Part D prescription drug benefit accounts for approximately 
$15.5 trillion, or half of the unfunded Medicare liability.  Congress should 
immediately repeal the disastrous drug benefit passed in 2003 by President 
Bush and a Republican Congress.  

Fiscal conservatives should not be afraid to attack entitlements 
philosophically.  We should reject the phony narrative that entitlement 
programs are inherently noble or required by “progressive” western values.  
Why exactly should Americans be required, by force of taxation, to fund 
retirement or medical care for senior citizens, especially senior citizens 
who are comfortable financially?  And if taxpayers provide retirement and 
health care benefits to some older Americans who are less well off, can’t we 
just call it welfare instead of maintaining the charade about “insurance” 
and “trust funds”?

Military spending and interest on the national debt similarly represent large 
federal expenditures that Congress must address by rethinking our foreign 
policy and exercising far greater oversight over the Federal Reserve and the 
Treasury department.  

I have for a long time criticized our interventionist foreign policy and the 
Fed, and I will continue to do so.  It’s time for Congress to face the 
fundamental problems that affect Social Security and Medicare, and show the 
courage necessary to make real changes to both programs by rejecting the 
welfare/warfare state.

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