Politicians in Washington, D.C., like to talk about their “children and grandchildren” much more than they care to listen to them.
If they did listen, our country surely would not be in $17 trillion of debt and sinking deeper.
That is why I recently went to Capitol Hill, as part of millennial-led “The Can Kicks Back” campaign, to meet with my elected officials and their staffs in person. I told them that my generation wants to see more problem solving and less political point scoring. We need a bold, generationally balanced and bipartisan fix to our national debt.
Our message is starting to get through. Sens. John Thune (R–S.D.) and Tim Kaine (D-Va.) and Reps. Aaron Schock (R-Ill.) and Jim Cooper (D-Tenn.) recently introduced the INFORM Act based on a policy proposal by The Can Kicks Back. This legislation would incorporate two proven tools, generational accounting and fiscal gap analysis, into the budgeting process in order to show the impact of fiscal policy on young people and future generations.
This additional information will be critical in focusing Washington on the problems at hand and what is at stake for young people. The INFORM Act will confirm what many close observers already know to be true:
First, our nation’s fiscal imbalance is much larger than official government debt. There are trillions of dollars of obligations owed to current and future retirees through programs like Social Security and Medicare that are held off of the government’s balance sheet. Politicians have underfunded and over-promised these benefits, and this is the primary reason that our country remains on an unsustainable fiscal path.
Stabilizing the debt over the next decade while ignoring the true challenges that lie beyond, as Washington has done, is shortsighted and irresponsible. By some estimates, our long-term fiscal gap is 19 times larger than current public U.S. debt –some $222 trillion.
Second, young people and future generations will foot the bill for our budget imbalance. All living adults today are projected to receive more in direct benefits back from government that they will have paid in taxes. In the Medicare program alone, the average retiree will receive three dollars back for every dollar her or she paid in. The difference represents a tab that is passed down from one generation to another, until someone inevitable has to the pay the price.
These intergenerational transfers are growing larger as government spends more entitlement programs with the retirement of the Baby Boomers and less on crucial investments in our future. According to the International Monetary Fund, if we do not act soon, net taxes on future generations would have to be 21.5 percentage points higher than today in order to close our country’s fiscal gap.
Third, the longer we wait to solve our fiscal problems, the larger the burden young people will be forced to bare. Interest on our national debt, for example, is a compounding force that buys our country nothing but time. Further, the longer we wait to make adjustments to retirement programs, the fewer Americans alive today who are near or in retirement will share in the necessary sacrifice, thereby increasing the tax increases or benefit cuts on the young. For example, if one were to use tax increases alone to make Social Security solvent over the next 75 years, it would require a 2.66 percent increase in the payroll tax, if we act today. If we wait until the program’s trust fund runs dry in 2033, the necessary tax increase would be 4.1 percent, according to the Trustees.
Leaders in Washington must face these fiscal facts, not keep kicking the can. We need a federal budget that is both fiscally sustainable and generationally equitable – meaning a budget that, over the long-term, spends only as much as it takes in and does so in a way that each generation pays its own bills.
While it might make for good politics, hiking taxes on the rich or cutting foreign aid is not going to solve our budget imbalance. Instead, leaders must couple comprehensive tax reform that raises additional revenue with structural entitlement reform that drastically slows the growth in government spending. Failure to do so in the near term will simply condemn young people and future generations to a lower standard of living than their parents and previous generations.
I am going to keep fighting for my future and I encourage others to join me at www.TheCanKicksBack.org.
Ryan Ward is a student at Middle Tennessee State University and member of The Can Kicks Back, a millennial movement to defeat the national debt and the millennial outreach partner of The Campaign to Fix the Debt.