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Thread: We must cut entitlement spending

  1. #11
    Meat Tornado Array DiscoBiscuit's Avatar
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    Apr 2009


    This disagreement is derailing the thread.

    Lets just agree to disagree.
    Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.
    - Edmund Burke

    8w9 sx/so

  2. #12
    insert random title here Array Randomnity's Avatar
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    6w5 sp/sx


    Quote Originally Posted by DiscoBiscuit View Post
    This disagreement is derailing the thread.

    Lets just agree to disagree.
    lol, it's suddenly derailing when someone disagrees with you? He's talking about the graph in the OP. Can't get much more on-topic than that.
    -end of thread-

  3. #13
    Dreaming the life Array onemoretime's Avatar
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    Or we could, you know, raise taxes.

  4. #14
    Meat Tornado Array DiscoBiscuit's Avatar
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    Apr 2009


    He just edited his post to include more specific issues with the graph.

    I was responding to his post prior to the edit.
    Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.
    - Edmund Burke

    8w9 sx/so

  5. #15
    Senior Member Array Lateralus's Avatar
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    May 2007


    Here's one fix that would save billions of dollars. Merge Medicare and Medicaid into a single program. Currently, Medicare is funded 100% by the federal government. Medicaid is funding is split between the states and the federal government. This causes inefficiencies with care because Medicare and Medicaid cover different procedures. State governments want patients to have procedures that covered by Medicare so they can save money. The Feds wants patients to have procedures that are covered by Medicaid so they can save money. This leads to things like retirees being sent to the ER for issues that could be resolved in a nursing home clinic (which is much less expensive). This is a huge waste of money and is entirely the result of an inefficient bureaucracy.

    Other solutions include making the federal government responsible for all the funding for both programs so there are no more budget fights. There are other solutions that could help to resolve this issue, but I'm not going to list them all.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  6. #16
    Meat Tornado Array DiscoBiscuit's Avatar
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    Apr 2009


    You want a better source FDG, how about the Congressional Budget Office.

    This is a report from the CBO on reducing spending.

    There isn't enough space to post the whole thing here but I'll see if I can't find a couple of relevant bits.

    CBO projects that spending for Social Security,
    Medicare, Medicaid, and other health care programs will
    grow from 9.9 percent of GDP in 2010 to 12.0 percent
    by 2021, driven largely by rapid growth in health care
    costs. At the same time, outlays for income security programs
    (such as unemployment compensation, SNAP, and
    certain refundable tax credits) will decline relative to
    GDP, from 3.0 percent in 2010 to 1.3 percent by 2021.
    That projected decline reflects an expected economic
    expansion, which will reduce the number of people
    eligible for many income security programs, and scheduled
    changes to tax provisions, which will reduce the
    refundability of some tax credits.
    Assumptions Underlying Projections of
    Mandatory Spending

    In creating its baseline budget projections, CBO generally
    assumes that existing laws will remain unchanged.
    That assumption applies to most, but not all, mandatory
    programs. Following long-standing Congressional procedures,
    CBO assumes that most mandatory programs that
    are scheduled to expire in the coming decade under current
    law will be extended instead. In particular, all such
    programs that predate the Balanced Budget Act of 1997
    and that have outlays in the current year greater than
    $50 million are presumed to continue under CBO’s baseline;
    for programs established after 1997, continuation is assessed on a program-by-program basis in consultation
    with the House and Senate Budget Committees. The
    assumption that expiring programs will continue has little
    effect on CBO’s projection of total mandatory spending
    for 2011. However, that assumption raises projected
    mandatory outlays by $118 billion (or about 3 percent)
    in 2021 and by a total of about $1.0 trillion between
    2012 and 2021.
    Sources of Growth in
    Mandatory Programs

    A number of factors—such as changes in eligible populations,
    increases in health care costs, developments in the
    economy, and actions by state governments—influence
    growth in federal mandatory spending. The importance
    of specific factors varies among programs.

    Demographic Changes

    Many mandatory programs provide benefits to specific
    populations, with eligibility a function of such criteria as
    age, income, and family status. People who meet those
    eligibility rules are typically entitled to benefits.9 For such
    programs, an important factor in CBO’s baseline is the
    effect of demographic changes on the size of the population
    enrolled or participating in the program. For example,
    CBO’s projections of Medicare spending incorporate
    the impact of the aging of the baby-boom generation,
    whose oldest members are now reaching the age of eligibility
    for Medicare. CBO estimates that the number of
    enrollees in Medicare will grow from 45 million in 2010
    to almost 60 million by 2021.

    Similar demographic pressures will affect outlays for
    Social Security, the largest federal spending program.
    Those outlays rose by 3.4 percent in 2010, primarily
    because both the retirement (OASI) and disability (DI)
    components of the program saw increases in the number
    of people enrolled. Over the 2011–2021 period, as more
    baby boomers become eligible for OASI benefits, the
    number of people collecting those benefits will grow by
    about 3 percent per year, CBO estimates—from 44 million
    in 2010 to 59 million by 2021. In addition, average
    OASI benefits will rise over time, both because benefits
    for people who are already collecting them are subject to
    annual cost-of-living adjustments (COLAs) to keep pace
    with inflation and because initial benefits are based on
    individual earnings, which tend to grow with time. For
    all of those reasons, OASI outlays are projected to
    increase by about 6 percent a year in the coming decade
    (see Table 2-1).
    The number of people receiving DI benefits jumped by
    almost 5 percent in 2010, to nearly 10 million. Higherthan-
    average increases in enrollment are expected to
    persist through 2012, largely because the high unemployment
    rate means that many disabled people will continue
    to face meager job prospects. After 2013, however, the
    annual growth rate of enrollment is projected to average
    1.2 percent, as a strengthening economy leads fewer people
    to seek disability benefits and as more people qualify
    for benefits under OASI.

    Growth in Health Care Spending per Person

    In the case of health care programs, although demographics
    are a significant element of CBO’s projections,
    expected growth in health spending per person is also
    important. Enrollment in Medicare is projected to
    increase by about one-third between 2010 and 2021, and
    spending per Medicare beneficiary is expected to rise by
    about one-half over that period. Some of the latter rise
    stems from overall inflation, and some results from
    growth in spending per beneficiary over and above inflation.
    Altogether, CBO projects that spending for the
    Medicare program will roughly double between 2011 and
    2021 in dollar terms and will increase from 3.6 percent
    of GDP to 4.3 percent of GDP. Growth in health care
    spending per person will also boost spending on Medicaid
    and other mandatory federal health programs in the
    coming decade.
    Over the longer run, rising health care spending per
    person will continue to drive up federal health spending
    under current law. For the past several decades, the rate of
    growth of health care spending per person (adjusted for
    the effect of changes in the age composition of the population)
    has exceeded the growth of per capita GDP—a
    phenomenon referred to as “excess cost growth.” Between
    1985 and 2008, for example, excess cost growth averaged
    1.5 percentage points a year for Medicare, 1.2 percentage
    points for Medicaid, and 1.9 percentage points for other
    national health spending.10 CBO expects rates of excess
    cost growth to slow somewhat over time. Even so, it projects
    that spending for Medicare and Medicaid combined
    will climb from 5.5 percent of GDP today to 11 percent
    of GDP by 2035, with slightly more than half of that
    increase resulting from excess cost growth and slightly less
    than half from the aging of the population.

    Economic Changes

    Overall economic trends also influence CBO’s estimates
    of mandatory spending. Growth in productivity and
    GDP, changes in prices and wages, and other economic
    factors affect both the number of people who participate
    in mandatory programs and the cost of providing the
    benefits specified in current law. Therefore, CBO’s baseline
    budget projections depend on the agency’s economic
    projections. For example, a forecast of lower inflation
    would tend to restrain projections of mandatory spending,
    because of smaller COLAs for some programs and
    because of slower growth in input prices for other
    The recent economic downturn had a significant impact
    on several mandatory programs. A decline in consumer
    prices precluded COLAs for Social Security benefits in
    2010 and 2011, so Social Security outlays were lower
    than they would have been otherwise. CBO expects
    Social Security COLAs to resume in 2012. Outlays for
    the Supplemental Nutrition Assistance Program doubled
    between 2007 and 2010, to $70 billion, as enrollment
    leapt from about 26 million people to 40 million. CBO
    estimates that spending for SNAP will increase by
    another 10 percent in 2011, to $77 billion, as the
    enrolled population continues to swell. SNAP enrollment
    is expected to decline in later years as the economy
    improves, falling back to roughly 31 million people by
    2021 in CBO’s baseline projections. Likewise, outlays
    for unemployment compensation quadrupled between
    2008 and 2010, reaching $159 billion, because of high
    unemployment rates and legislation that enhanced
    benefits. CBO projects that outlays for unemployment
    compensation will return to prerecession levels as the
    economy improves, falling to $60 billion (roughly the
    2007 level) in 2021.

    Actions by States

    Among mandatory programs, both Medicaid and the
    Children’s Health Insurance Program (CHIP) are funded
    jointly by the federal government and the states. Federal
    funding matches a portion of state spending, within
    established rules (although total federal funds for CHIP
    are capped). Thus, federal spending on those programs is
    partly determined by states’ behavior, and the growth rate
    of spending (particularly for Medicaid) will depend on
    states’ decisions about eligibility criteria, the types of services
    that the programs will cover, and the prices that
    states will pay for those covered services.
    Approaches to Reducing
    Mandatory Spending

    Because mandatory programs account for the majority of
    federal spending—and their share is expected to continue
    to rise—reducing the budget deficit significantly in both
    the short and long terms would be very difficult without
    restraining the growth of mandatory spending. Annual
    appropriations do not determine the amount of mandatory
    spending, so policymakers must look to different
    approaches to control such spending. Examples of possible
    approaches include modifying the automatic indexation
    of benefits, the populations entitled to benefits, or
    the federal government’s share of spending.
    Changing the Automatic Indexation of Benefits
    Many mandatory programs use some form of indexing
    for inflation to determine annual changes in benefits.
    Therefore, the choice of an index or inflation adjustor
    can have a significant impact on a program’s spending.
    Using a different measure of inflation or adjusting benefits
    by less than the full measured change in prices each
    year can generate savings that, because of the impact of
    compounding, will tend to grow over time.
    Changing the Populations Entitled to Benefits
    Mandatory programs that provide benefits to specific
    populations grow or contract with the size of the populations
    served. For example, people may enroll in income
    support programs during periods of economic dislocation
    and then leave once their situation improves. Consequently,
    in a downturn affecting the overall economy, the
    federal government may be faced with additional mandatory
    spending at the same time that revenues are lower.
    (Such changes in government spending and revenues are
    known as “automatic stabilizers” because they occur independent
    of any legislative action and tend to stabilize
    economic activity.) As another example, more people
    will enroll in mandatory programs over the next decade
    because the aging of the population will make a larger
    share of Americans eligible for Social Security, Medicare,
    and other programs that focus on older people. Moreover,
    increasing life expectancy means that many Americans
    will receive benefits from those programs for more years
    than people would have in the past. Policymakers could
    seek to mitigate the growth of mandatory spending by
    altering the criteria that determine eligibility for income
    support programs or by increasing the eligibility age for
    certain benefits.

    Changing the Federal Government’s
    Share of Spending

    Federal spending on mandatory programs can be lowered
    by reducing the federal government’s share of the programs’
    spending and increasing the shares borne by state
    governments, program participants, and others. For
    example, in Medicaid and other programs that involve
    state matching funds, the federal commitment could be
    reduced, thus shifting costs to the states and encouraging
    states to trim spending on those programs. In health care
    programs such as Medicare, premiums or cost sharing
    could be increased, thus shifting costs to beneficiaries and
    encouraging them to restrain their use of services. Requiring
    people to pay more for a service would decrease federal
    costs and might lower the overall cost of providing
    that service if people responded by using less of it.

    Mandatory Spending Options in
    This Chapter

    The options that follow encompass a broad range of
    mandatory spending programs. Although the options are
    grouped by program, some of the options for different
    programs are conceptually similar, in line with the
    approaches to reducing spending discussed above. For
    instance, two options address the effects of applying different
    inflation factors to the benefit formulas for certain
    programs. Other options would alter the balance of spending between the government and program participants
    or between the federal government and the states.
    Of the 32 options in this chapter, 15 deal with spending
    for health care programs. Another 7 would make changes
    to Social Security or other retirement programs. The
    remaining options focus on Fannie Mae, Freddie Mac,
    and programs that deal with education, energy, or agriculture.
    The budgetary impact of each option is estimated
    independently, without consideration for potential
    interactions with other options. The table accompanying
    an option shows the option’s estimated budgetary effects
    in each of the next 10 years, as well as 5- and 10-year
    totals. Those effects are measured relative to the spending
    that CBO projects would occur under current law, as
    shown in the agency’s January 2011 baseline.
    In addition to the options in this chapter, three more
    options—which would increase rather than decrease
    mandatory spending—are discussed in Appendix A.
    Those options relate to provisions of Medicaid, Medicare,
    and Social Security. They are included in this volume
    because CBO frequently receives requests for estimates of
    their budgetary effects.
    How's that for a credible source.
    Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.
    - Edmund Burke

    8w9 sx/so

  7. #17


    Quote Originally Posted by onemoretime View Post
    Or we could, you know, raise taxes.
    Oh, that'll happen too. It has to.

  8. #18
    Meat Tornado Array DiscoBiscuit's Avatar
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    What Ob said... We'll have to.

    We need to find the most functional yet politically realistic combination of cuts and taxes, so that we don't end up unable to borrow money from anyone.
    Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.
    - Edmund Burke

    8w9 sx/so

  9. #19
    Dreaming the life Array onemoretime's Avatar
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    Jun 2009


    I don't think anyone disagrees that we need to take a hard look at what we're spending, and how we're spending it. I'm just afraid that there is so much concentration on austerity measures at this moment for the specific purpose of suppressing the future tax increases, even when it could be to the ultimate detriment of our country.

  10. #20
    Meat Tornado Array DiscoBiscuit's Avatar
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    There is definitely more than a grain of truth in what you're saying OMT.

    Whether for good or for ill, I think the problem is so massive that we will be forced use both cuts and taxes whether we want to or not. Our government will (ultimately) be forced to choose between dropping the shallow political rhetoric we see today for a more pragmatic approach, or face drastic ebb in our national prominence (putting it lightly).
    Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.
    - Edmund Burke

    8w9 sx/so

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