By John Ubaldi, “Ubaldi Reports”

With all the attention focused on the partisan turmoil surrounding the impeachment of President Donald Trump, and the continue turmoil from the coronavirus one little known obscure document released at the end of January by the Congressional Budget Office (CBO) went unnoticed.

The CBO issued a report stipulating that if federal spending remains the same in less than 10 years the U.S. will be running annual deficits close to $2 trillion.

Budget analysts at the CBO have outlined over the course of the next 10 years the federal governments annual deficits will be closer to $2 trillion then the previously reported $1 trillion, this again under the assumption that most of the tax cuts from the 2017 tax reform act will expire.

Both Democrats and Republicans have failed to address what the CBO considers the biggest driver of budget deficits, the out of control spending of the entitlement programs which is pegged close to 70% of the U.S. federal budget.

Federal entitlement programs include Social Security, Medicare, Medicaid and interest on the debt.

Difference between Non-Discretionary and Discretionary Spending

Entitlement spending is considered non-discretionary spending that differs from discretionary spending by requiring annual appropriation through annual legislation which pass through the various House and Senate appropriation committees and various subcommittees’, including defense, cabinet departments, and various agencies of the federal government.

The difficulty both Republican and Democratic Parties have with reducing entitlement spending is that it’s part of non- discretionary spending, and to alter it or reform it you have to change the law, and presently there is no appetite by either party to do so.

Bush Tries to Reform Social Security

President George Bush, Jr tried unsuccessfully in reforming social security, even went as far to incorporate into his 2005 State of the Union Address stating, “As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers. And the best way to reach that goal is through voluntary personal retirement accounts.” This approach, the President argued, would offer younger workers a “better deal”: The rate of return would be higher than in the traditional system; the accumulation could be passed on to children and grandchildren; and “best of all, the money in this account is yours, and the government can never take it away.”

This effort by the Bush administration failed in part to Democrats who vehemently opposed any change to the entitlement system, and the disarray of the Republican Party to present a coherent broad-based policy strategy that appealed to those currently on social security and those about to enter retirement.

In 2010, President Obama commissioned the National Commission on Fiscal Responsibility and Reform, or as it became commonly known as the Simpson-Bowles or Bowles-Simpson, named after its co-chairs former Wyoming Republican Senator Alan Simpson and Former Democratic Chief of Staff to President Bill Clinton, Erskine Bowles.

This plan failed because Democrats on the commission didn’t want any cuts or reforms and Republicans were adamant against any taxes being raised, plus culminating in the failure by President Obama to support recommendations from his own appointed commission.

Even the Manhattan Institute’s Brian Riedl pointed out, the annual shortfall in Medicare and Social Security costs, currently at $440 billion, will rise to $1.9 trillion by 2030. Between now and 2049, these two programs combined are projected to pay out $63 trillion more than they will take in.

2020 Presidential Candidates Fail to Address Entitlement Spending

With the 2020 presidential campaign fully underway, less attention has been paid to how each of the candidates vying to be president would reduce America’s enormous debt burden.  So far President Trump doesn’t want to address it or is in denial over its immense magnitude.

President Trump’s latest budget submission does reduce spending on entitlement spending in the form of work requirements for Medicaid and food stamps, which also includes the tightening of eligibility access to disability benefits.

Even President Obama proposed cuts to entitlement spending but like President Trump these reductions are more administrative reductions then any substantive reforms of the programs.

Democrats to ramp up Entitlement Spending 

Democrats on the other side of the pendulum, especially those campaigning for president want to vastly expand the nation’s entitlement programs and other federal spending which many economists have calculated will cost the federal treasury upward of $96 trillion in new spending.

With the presidential campaign in full swing let’s see if both Democrats and Republicans offer any tangible reforms to the nation’s entitlement programs otherwise entitlement spending will continue consuming an ever greater part of the federal budget, and over time the only solution to its fiscal solvency will either be massive increase in taxes or severe reductions in benefits or a combination of both, no matter what it will be painful!