The giants of the budget, Medicare and Social Security, "are on autopilot," and their outlays are rising at a faster clip than the economy, she adds. "If you don't fix the problem area of the budget, then the problems are going to stay. That's the problem."
Such pronouncements have long been a staple of blue-ribbon fiscal panels, most recently President Obama's National Commission on Fiscal Responsibility and Reform. But with the first of the baby boomers eligible to retire this year, the matter is taking on greater urgency. If current policy does not change, rising retiree health costs and claims on Social Security will propel mandatory spending to levels never seen before, squeezing out room for future discretionary spending.
Here's the glide path the US is on:
•By 2025, Medicare, Medicaid, Social Security, and interest on the federal debt would claim all federal revenues.
•Interest on the national debt would rise to nearly $1 trillion nine years from now, up from $200 billion today.
•US debt held by the public would grow to 185 percent of the national economy by 2035, driving up interest rates and lowering growth and living standards.
With a presidential election cycle already ramping up, neither the White House nor congressional leaders are eager to be the first to touch popular entitlement programs, known as the "third rail" of American politics. In the past, even suggesting the need for cuts has been a death blow to political candidates.