There’s a new expression in Washington, something called “entitlement reform.” In basic terms it means that the incoming Obama Administration is going to have a hard and careful look at a number of programs for seniors, including Social Security and Medicare.

Now you might think that such programs are politically inviolate, government efforts which cannot be touched for fear of alienating senior voters, a major power block in electoral politics. Normally such a view would be easy to support, but not now.

As President Obama told the Washington Post, “what we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further. “We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else’s.”

Things have changed and there is no longer any federal program which is immune to pruning. The reason? In basic terms the government is bankrupt. The country went from four years of surpluses in the last Clinton term to eight years of deficits under the Bush Administration — deficits which do not include a number of costs which must be faced in the future.

How bad is it? Let’s look at the numbers. According to the Treasury Department the federal debt stood at $5,674,178,209,886.86 in the year 2000 — that $5.7 trillion. In 2008 the debt reached $10,024,724,896,912.49.

This larger debt might actually be sustainable if the economy and the job base were growing, but that’s obviously not the case. Bright economists have finally agreed that the country is in a recession, something anyone with common sense has known for some time.

Not only is the federal debt engorged, we continue to important vastly more than we export, the job base is falling and many states have run into financial difficulties. The net result is that every federal program is now subject to an audit from top to bottom.

The easiest way to “right size” Social Security is to change the age at which full benefits are available, from 67 to say 68 or 69.

When will the conversation begin? According to the Post, the “discussion will begin next month, Obama said, when he convenes a ‘fiscal responsibility summit’ before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.”

For the full Post story, please see: Obama Pledges Entitlement Reform.

This entry was posted on Wednesday, January 21st, 2009 at 2:31 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.