Bennett Urges Fiscal Restraint for Entitlement Programs
“Despite a ‘perfect storm’ of blows to the economy, recent economic indicators tell us what many have already been feeling, that the economy is now experiencing a strong recovery,” said Bennett. “Over the next year, we can look forward to a robust economy and the job creation that will follow. We must begin to focus on how to maintain a strong economy for the next 10 years and beyond.”
In particular, Bennett addressed long-term entitlement spending and how it is critical the Congress and administration be fiscally responsible in areas other than discretionary spending – particularly with respect to Medicare and Social Security, which will continue to grow as a share of total government spending indefinitely.
Bennett remarked that continued increases in the deficit could pose significant economic problems if they persist and urged greater attention to federal spending, stating that recent growth rates are clearly unsustainable.
“We need to slow the growth of discretionary spending, but it is less than half of the equation,” said Bennett. “The bigger problem we face in the long run is rapidly escalating entitlement spending. Long-run fiscal discipline demands that we consider serious reforms before this massive spending growth comes to pass.”
Bennett reiterated that one of the greatest concerns for the economy is the enormous burden that will be placed on it once the baby boomers begin to retire toward the end of the decade. “As these men and women retire, the nation faces a serious challenge with fewer workers available to support each retiree. We will see increasing pressure on Social Security and Medicare,” he added. In order to manage this change, Bennett urges Congress and the Bush administration to undertake serious reforms of these programs.
Bennett also discussed the beneficial effect that tax cuts have had on the economy. He stated that by failing to maintain them in law, Congress would be short-circuiting the powerful incentives that encourage work, saving, and investment and spur economic growth.