Looming Entitlement Crisis Deserves More Than One Throwaway Line in the State of the Union

The State of the Union address is a venerable and useful tradition. A fulfillment of the president’s constitutional duty to give Congress a report of the nation as he sees it and recommendations of what to do next.

And yet in many ways the speech has been bastardized from its original purpose. Long removed from being informational, the State of the Union has become another, in an ever growing set, of political speeches, aimed more at emotional appeals than policy prescriptions. In many ways it has mirrored the fate of the Super Bowl halftime show. What was once as simple as getting a great marching band slowly morphed into attracting popular music acts to hold viewer’s attention. Now, the music has become completely secondary, with the performer lip-synching the vocals while dancing among the fireworks.

Likewise, President Obama has decided to go the route of form over substance, of flash-bang wizardry over sensible debate. This was no more evident than in his heavy handed appeal to one of his most important constituencies – young adults. As Ron Brownstein writes in National Journal:

Especially striking was how much of it seemed targeted directly at the massive and diverse millennial generation, born between 1981 and 2002. Obama addressed them repeatedly: by insisting that entitlement spending on the old must face some limits to prevent it from crowding out investment in the young; by framing climate change as a generational challenge; by pledging to provide young people with more training and to confront rising college costs; and by closing with a paean to citizenship that reflected their civic impulses. “They are the leading edge of where the country is headed ideologically as well as demographically,” one senior White House aide said.

And yet by attempting to bring us into the conversation Obama, as only he can do, overlooked us. It was akin to being pat on the head and sent back to the kids’ table. That’s because he failed to substantively address the number one threat to our generation – exploding entitlement programs that take money out of our relatively shallow pockets, run it through an inefficient government machine, and place it in the wallets of older, wealthier generations.

This whole process is anathema to the ideological foundations on which this country was built. Consider this – even after Franklin Roosevelt massively expanded the government through his New Deal programs the government still only spent about $3,000 per person in today’s dollars. By contrast we now spend more than $20,000 per person per year.

And what do we have to show for it? The number of people living below the poverty line is the highest it’s been since the government first started keeping numbers 52 years ago. Despite a rash of wealth transfer programs income inequality in at an all-time high, surpassing even levels reached during the Great Depression.

Regardless of ideology or where you fall along the partisan spectrum, the entitlement problem boils down to math. This is a point that even the left-leaning Washington Post editorial board seems to grasp:

“We detected a whiff of complacency when President Obama declared, in the State of the Union address on Tuesday, that $2.5 trillion in 10-year budget savings achieved so far put the nation “more than halfway towards the goal of $4 trillion that economists say we need to stabilize our finances.” The president added: “We need to finish the job.”

Deficit reduction is still more urgent than these words imply, recent favorable trends notwithstanding. The U.S. might be able to get to the $4 trillion mark with relatively modest additional measures — but “the job” of truly stabilizing America’s long-term finances would still be anything but finished.

That’s because our entitlement programs – Medicare, Medicaid, Social Security, and now (most troublingly) Obamacare – are all set to dramatically expand as the population ages. Just how big is the problem? Huge. If you add up the unfunded liabilities of the various entitlement programs and federal pensions (the promises the government has made minus the projected tax revenue dedicated to those programs) it comes to an incredible $86.8 trillion.

Will it ever come to that? No. Our creditors won’t let that happen. Instead the government will be forced to dramatically raise taxes—thereby shrinking the economy—and dramatically cut benefits—thereby shrinking the entitlement programs we’ll spend our lives paying into.

If all of that sounds pretty terrible that’s because it is. And it deserves more than one throwaway line in the State of the Union. It deserves a sensible and sustained effort to fix it. Our generation should demand as much.