Liz Peek in Fiscal Times

President Obama does not deserve to be reelected. By refusing to address the greatest challenge this nation faces – our financial security – Mr. Obama has failed the American people. Despite warnings from the IMF, the credit ratings agencies, China — our principal foreign creditor — and the American people, the president continues to offer up budgets and programs that ignore the dire trajectory of Medicare and Social Security spending, putting the future of this nation at risk.

Let’s get specific. This week Mr. Obama set forth a budget calling for yet another trillion-dollar deficit, the fourth in four years. Through certain spending cuts, some gimmickry (counting not spending on two wars as deficit reduction) and $1.5 trillion in tax hikes, the budget gap is projected to shrink to $575 billion in 2018, comfortably beyond the range of the country’s political telescope.

Each of the proposal’s major provisions scratches a partison itch: raising taxes on the wealthy, imposing new fees on banks, eliminating tax cuts on oil companies, spending $476 billion on transportation projects (mollifying construction crews teed off at the Keystone veto),  allotting $30 billion for (guaranteed voting blocks) police, teachers and fire department workers, and so on. As the Committee for a Responsible Federal Budget summarizes, the president’s budget stabilizes our debt at 76 percent of GDP – “roughly double historical debt levels.” This is not acceptable.

To be fair, Mr. Obama proposes to save $364 billion over ten years in Medicare and Medicaid, mainly through slicing payments for prescription drugs ($156 billion), taking money from skilled nursing facilities and long-term care hospitals ($63 billion)  and changing the way the government compensates doctors and hospitals for bad debts ($36 billion). The budget assumes the fantasy 30 percent cut in pay to healthcare providers contained in earlier projections. If you believe that these proposals will be adopted, please send me a certified check of $1,000 to claim your million-dollar lottery prize…

And now, the “money” grafs:

The crisis in our country is two-fold: a rising number of people receive ever-increasing assistance from the government. At the same time, fewer Americans are paying taxes. The inevitable outcome is a widening gap between revenues and outlays: the deficit.  The recession has accelerated the problem. Here are the facts:

Last year, the first of the 78 million Baby Boomers reached retirement age. Between now and 2050, the number of people over 65 will more than double — from 40 to 89 million. This huge population will receive increasing funds from Social Security, Medicare and Medicaid, and if nothing is done, it will be crippling. Social Security outlays, according to the annual Trustees report, will advance from 4.2 percent of GDP in 2007 to 6.2 percent in 2035. The program, which ran in the red the past two years for the first time since 1983, will have exhausted its trust assets in 2036. Thereafter, the board projects, tax revenue will only pay for about three quarters of scheduled benefits. In short, Social Security as we know it will not survive the Baby Boom bulge.