The following is a letter that was sent to newspapers in Sen. Orrin Hatch's home state of Utah.
To the Editor,
Earlier this week, Sen. Orrin Hatch (R-Utah) addressed the Senate on its latest budget proposal. On the topic of social insurance programs, Sen. Hatch said:
“Put simply, this budget ignores our unsustainable entitlement spending and allows it to continue on a path that will bankrupt these programs.”
Sen. Hatch went on to say:
“This isn't new information. It isn't privileged or classified. Anyone paying attention to our nation's fiscal situation is aware that these challenges exist.”
It is true that information on the finances of these problems is freely available. And the Senator’s constituents might like to know that by all indications, these programs are actually not on a path to bankruptcy. The projections of both the Social Security Trustees and the nonpartisan Congressional Budget Office show that Social Security will continue to be able to pay full benefits for the next 20 years and more than 75 percent of benefits from then on.
In terms of Medicare, projections show that the Affordable Care Act put into place cost controls that allow the program to pay full benefits through the year 2024 and the vast majority of benefits for the foreseeable future. And if Medicare cost growth continues at the same rate as we've seen over the past five years, Medicare will essentially flatline as a portion of our budget, and most of the projected long-term budget deficits will fall away.
In other words, even if Congress does nothing at all right now, these programs will continue to exist for future generations. The remaining shortfall in the Medicare programs relative to the size of the economy is roughly one-third the size of the increase in defense spending associated with the wars In Iraq and Afghanistan.
As a member of the Senate Finance Committee and the Subcommittee on Social Security, Pensions and Family Policy, it is crucial that Senator Hatch accurately describes the finances of these programs. Anything less endangers and weakens programs that are vital to the retirement security of retirees around the nation.
Co-Director, Center for Economic and Policy Research