I believe that the vast majority of the ballooning national debt is caused by social welfare programs and entitlements. Entitlements, which include Social Security, Medicare and Medicaid, have not only been severely abused in this country but poorly planned out by the government of the past.
Medicaid is a program that was instituted to aid the destitute with healthcare coverage. It provides 100 percent coverage to those that qualify. Typically, the program is designed for indigent families with dependent children, the elderly and people with disabilities. This is because many with disabilities usually have higher medical bills, and sometimes cannot work. Medicaid was created with these provisions in mind, but as of late has become an out for the aged that are not completely covered by Medicare, another federally-aided social program. That means that if one were to eliminate assets in anticipation of retirement, one would qualify for Medicaid to cover out-of-pocket expenses such as nursing home care. Many people cheat the system in this regard.
Medicaid funds are derived 50 percent from the states and 50 percent by the federal government. The states are in charge of management of these funds and their distribution. Because the states receive limitless federal grants for the program, and each dollar they spend is matched by the federal government, states were not very discriminating in their allotment of funds and determination of who is qualified. This has depleted the funds that are withheld from the public via income tax and has led to a great amount of the nation’s debt.
Of course, Medicaid is not the only program funded by the federal government that is abused by the public. Food stamps are funded by the federal government as is actual cash assistance. Welfare had been considered an “open-ended right” and was adopted as a way of life for small segment of the population. The majority of this money was going to able-bodied single mothers from the inception of the program in the 1960s until President Clinton decided to change the law in 1996. He signed the Welfare Reform Act of 1996 into law; however the damage from each individual state’s deregulation was already done.
He mandated that each state would receive a flat rate grant from the government based on population, and instituted welfare-to-work initiatives. There was a five-year limit placed on assistance. The Aid For Dependent Children program was renamed Temporary Assistance to Needy Families. Unfortunately, because of fraud and dishonesty, there still are recipients that can and have circumvented the laws of the system.
There are trillions of dollars spent yearly on these programs, and when the federal income taxes cannot cover the costs, the government borrows from the public, thus increasing the debt. There are too many people taking and those that are giving cannot fund all that is needed.
I do believe, however, that Social Security, unlike the aforementioned programs, is a necessity. It was just so poorly planned and constructed, that it was destined to fall apart. The idea made sense when most of America worked, prior to the creation of welfare, and there were more workers contributing to the proverbial till. At that time, in the 1930s, people would retire at age 62, collect for a few years and probably pass away before their 70th birthday. No one counted on a post-World War II baby boom occurring. Even when this did occur, no one changed the way things were done to prepare for when this generation retires. Though we are running a pretty high surplus in the Social Security Trust Fund, this is because of the number of workers in the work force, which, for now, includes the Baby Boomers. Because of the advent of birth control in the late '60s, and maybe even because of Roe v. Wade in 1973, the generation that was born of the Boomers is not very large. In this program, if a generation is not plentiful enough to fund the Social Security fund for their retiring parents, the government will have no choice but to borrow more money, thereby increasing spending and the debt.
Of course, Medicare is different from Medicaid because you must be of retirement age to qualify for it. It is healthcare for the elderly. However, though it is funded by the federal government, it does not cover all costs and expenses incurred. Therefore, this leads to more dependence on Medicaid, and fraudulent acts along the way. I believe that if Medicare were to cover more than it already does for the non-indigent elderly, we may be able to eliminate excess spending on Medicaid.
We do not have a choice with Social Security and Medicare. These are programs that all working adults contribute to and are entitled to by law. We cannot eliminate them as an expense from the government budget. However, we have to initiate reform now to ensure that we are not hit with a catastrophe. The surplus will be gone by 2017, and by 2020, Social Security will have to borrow funds to break even. By 2040, there will be nothing left in the trust fund at all. Because the surplus had in the past been used to overcompensate for other government expenditures and programs, many doubt that there is anything left there at all, even at the present time.
I am aware that we cannot eliminate these programs, but reform is necessary. In the 1970s because of a paperwork error, Social Security went nearly bankrupt. This happened again in 1983. Though it was not easy, reform was necessary to ensure continuation of the program and neither time was the program bailed out by funds the country could not afford to spend.
It is estimated that with the current provisions, all of these social programs will account for approximately 50 percent of government spending by 2050. In 2005 alone, $736.6 billion were spent on healthcare programs between Medicare and Medicaid, $523.3 billion were spent on Social Security and a whopping $362.9 billion were spent on social welfare programs for the poor! The irony here is that only $204 billion was spent total during the first three years of the war in Iraq, which is often cited as a major cause for federal debt in the recent past.
The problem lies mostly in cutting back in other areas of spending and redistributing those funds to the necessary entitlements such as Medicare and Social Security. There should be a federal committee to look after the states and control the welfare spending that has gone so far out of control. They should audit applications for food stamps and cash assistance to check for fraud and also audit the distribution of funds by each state to the undeserving and able-bodied. We should create more programs in all states like my native Connecticut’s “Care 4 Kids,” to help working single mothers with low-paying jobs to afford child care. There also should be state and local laws passed to ensure job security in the event of a child’s illness or a necessary absence due to family reasons. Save for the Family Medical Leave Act, which has holes in its legislation, the lack of allowances for the working single mother push the woman that would like to hold a legitimate job, and support her family, back into the open arms of an ever-welcoming system.
If we can provide oversight to just the cash assistance, food stamp and medical assistance provided to the indigent, we could prevent fraud that could potentially save enough money to save Social Security and Medicare for the retiring, deserving Boomers. At the least, it would help a great deal. Aside from the national defense, the depletion of Social Security should be an issue in the forefront of the government’s conscience. When these funds deplete, where will the Boomers’ children (my generation) turn to finance their retirement? They will probably use the welfare system, ironically. Those of us that did not save will have no other choice. Yet, with the circumstances regarding the economy, unemployment rising and jobs being shipped abroad, who can afford to save? Therefore, my generation’s children will be heavily taxed to handle the burden of a geriatric population on welfare, food stamps and Medicaid, or the government will borrow more money to support said programs.
In conclusion, we need to cut unnecessary spending, and redirect some of those monies to entitlements. Entitlements should be a major priority in the federal budget, because they are promised to every worker in the country in exchange for the tax burden that we all bear. It is estimated that with entitlements that were already “promised” to the public averaged in, our national debt is not $10 trillion, as reported, but actually $53 trillion. Because these programs cannot be eliminated, we will have to keep borrowing money that the country does not have unless we come to the realization that mandatory spending should supersede optional and outdated programs and initiatives.