Cost of Entitlement Programs Threatens Congressional Budgeting Power

Nathan Harman

As politicians begin deliberations in Washington on the national budget again, one focal point of policymakers will likely be how mandatory spending programs are taking up a much larger portion of the federal budget year after year. According to the Congressional Budget Office’s findings released last June, all federal funds will have to go towards mandatory spending programs by 2031. The latest proposal by the White House shows no change in course from the past four years, which could propel the U.S. towards this possibility at an even faster rate. 

But until any new budget is passed, it is important to consider the implications of the CBO’s findings. Each year it is Congress’ responsibility to determine how any funds not earmarked for mandatory spending programs are going to be used. According to the CBO, over 40 percent of the federal government’s total budget was controlled by Congress in 2000. Today that same number stands at 14 percent and will tick down to zero by 2031 if Congress and the White House maintain the same spending course that they have taken since 2015. 

What this means is that elected officials and policy makers will have no say in how federal money will be spent come 2031 because all government income will be pre-appropriated for mandatory spending programs such as Social Security and Medicare, which already take up 41% of the U.S. budget alone. This cuts the public off from any debate on how the government should allocate funding because there will be no funding left over after being used for mandatory programs for elected officials to allocate.

The reason why Social Security, Medicare, and Medicaid have become so costly is because of shifting age demographics. As baby boomers retire and millennials have fewer children, the average age of the population has steadily increased. There were almost nine workers for every Social Security beneficiary in 1955. That number has been whittled down to only three workers per beneficiary in 2018 and is expected to drop to three workers by 2030. 

This puts politicians in a tough spot. According to a 2017 Pew Research poll, only 3 percent of Democrats and 10 percent of Republicans support cuts to Social Security. For Medicare, 5 percent of Democrats and 15 percent of Republicans support spending cuts. This means that elected officials will have to somehow make tradeoffs between keeping their constituents happy while also making necessary cuts to aid programs to keep other government functions from being halted altogether. 

There will be no way to put off this spending problem like there has in the past for officials. Previously, politicians have had two avenues to pursue to dodge cuts: issuing federal debt, raising taxes, or a combination of the two. But by 2030, the CBO estimates that the cost to service previous federal debt will take up 6 percent of the budget. This means that to prevent an oversaturation of government debt and a potential debt rating downgrade, Congress will have to refrain from debt issuance to finance any action. Taxes will likely be out of the question as well because of how deeply unpopular tax increases are and only the most drastic tax increases could cover the government’s liabilities. 

This leaves budget cuts as the only viable option, despite how disenchanting they are to much of the country. However Congress decides to proceed with this in the future will likely face a myriad of legal challenges from former beneficiaries and a dissatisfied electorate.