McClatchy: Experts: Fiscal crisis threatens U.S. future

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Experts: Fiscal crisis threatens U.S. future
By Kevin G. Hall | McClatchy Newspapers

* Posted on Wednesday, October 31, 2007




WASHINGTON — As presidential candidates largely ignore the issue, looming fiscal challenges threaten to swamp the U.S. economy and erode America's superpower status, several of the nation's foremost experts on the federal budget warned Wednesday.

"We have been diagnosed with fiscal cancer," said David Walker, the nation's comptroller general, or chief auditor, testifying before the Senate Budget Committee.

The committee called the hearing to spotlight legislation that would create a bipartisan panel charged with recommending how to tackle promised spending on federal retirement programs that threaten to bankrupt the U.S. government.

"In the very least, it ought to be the framework that a new Congress and new president put in place," said Leon Panetta, co-chairman of the Committee for a Responsible Federal Budget and Clinton-era budget director.

Starting in 2017, Social Security will pay out more than it takes in from tax revenues. Over the next 75 years, that could add $4.7 trillion in present-day value to the federal debt.

However, that pales when compared with projected government health-care spending on retiring baby boomers, the more than 75 million Americans born from 1946 to 1964. Boomer retirement is projected to cost the Medicare system and state-managed Medicaid $33.9 trillion in present value over the next 75 years.

Unless changes are made to benefits and/or revenues, within the next three decades government spending on Social Security and Medicare could account for $1 of every $5 spent in the U.S. economy.

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