A Q&A with House Budget Chairman John Spratt (D-S.C.)
New challenges — and new opportunities — await us as our aging population doubles within the next decade. Today, people over the age of 65 make up roughly 12 percent of the population, but in the next 25 years they will account for almost 20 percent. That means one out of every five Americans will be a senior by 2030, at which time economists predict that businesses could face a labor force shortage of 35 million workers. They warn that this could translate into slower economic growth, and therefore lower living standards for everyone.
Here’s a fact that should worry everyone in Congress: Half of all American workers today have no pension or retirement plan from their employers. That means Social Security is their only source of retirement income. It is our belief that these numbers will only grow in the future.
The need to reform our entitlement programs, including Social Security and Medicare, is real and urgent. Delaying will only make the problems we face worse. The federal government — both Congress and the White House — has studied this issue six ways from Sunday. We don’t need another commission, or any other delaying tactic. We need to act, and it is Congress’ constitutional duty to take the lead.
Modern medical science has made tremendous strides in the past century. Groundbreaking research has led to cures for formerly fatal diseases, improved care for the terminally ill and increased the life expectancy of most Americans.
While modern medicine is helping us live longer, more active lives, most of us will still require long-term care at some point in our futures. If you think this is an issue only for senior citizens, think again. Much like retirement, Americans need to plan early and save for their nursing home or home-care options.
I’ll begin by correcting a widely held myth: There is no such thing as a “death tax.”
As members of the House Agriculture Committee and as representatives of farmers, ranchers and family-owned businesses, we know and understand the harsh reality of the death tax.
We have a savings crisis in this country. We aren’t saving enough as individuals, and we aren’t saving enough as a society. A little more than a decade ago, the personal savings as a percentage of disposable income was nearly 9 percent. Our personal savings rate went negative in 2005, almost reaching negative 2 percent in the third quarter of the year.
Until Congress acted last year, our nation’s retirement security laws were stuck in the 1970s, and millions of American workers and retirees were suffering the consequences. But the tide has turned, and private pension reforms — reforms that were years in the making — are now beginning to take hold. Indeed, we’re entering a new era.
