FLASHREPORT

WILL THE FUTURE GENERATION CONFRONT THE GORDIAN KNOT OF ENTITLEMENT SPENDING?

Michael Davidson. Mr. Davidson is Chief Executive Officer of Gen Next .

Recently the Washington Post ran a piece titled “What We Owe Our Young” by Justice Sandra Day O’Connor and Ambassador James R. Jones (also linked by the Sacramento Bee via the FlashReport).  The authors elaborate on the magnitude of the looming entitlement and budget crises and a summit that they have convened to engage young leaders on the issue, which was covered by C-Span.  I was fortunate enough to be one of those young leaders.

The Youth Entitlement Summit included about 11 under-30 leaders spanning almost the entire ideological spectrum.  The idea was that I, a conservative, would work with and learn from a progressive, Democrat, independent, little “L” libertarian, and so on.  Each panelist was impressive—informed, passionate, and forcible yet respectful in the delivery of their views.  

Modeled after congressional testimony, fellow panelists heard experts on health care, social security, budget, and tax issues testify before us.  Some experts were David Walker, former Comptroller of the United States government; Senator Norm Coleman; Governor Richard Lamm; Dr. Alice Rivlin at the Brookings Institution; Dr. Sylvester Schieber, Chairman of the U.S. Social Security Advisory Board; Maya MacGuineas, President of the Committee for a Responsible Federal Budget; Congresswoman Barbara Kennelly; David Sloan, Senior VP of the AARP; Isabel Sawhill at Brookings; Stuart Butler at Heritage;  Robert Bixby, President of the Concord Coalition; and more.

The problem is enormous and complex, but here’s some take away: entitlement reform is the single largest domestic challenge facing the next generation.  As Justice O’Connor and Ambassador Jones state, “Even if every dollar of wealth of every millionaire in the United States were magically diverted to pay these costs, 80 percent of the unfunded liabilities forecast for these three programs (medicare, medicaid, and social security) would remain on the books.”  They also note that “today's high school students might never experience a year in the workforce when their tax rates would not rise.”  Interest rates alone on government debt come out to $1,000 per person, and it’s compounding.   

Thus, we are way behind and far from catching up.  The volume for raising taxes is loud against a culture of dependency on these programs.  We will be left in a severely weakened economic position, which also has serious implications for our posture and clout in world affairs.  It’s probably not smart to rely on China to hold most of our debt.

The entitlement crisis is a Gordian Knot that must be cut, or we are strangled and unable to pursue other national priorities to launch us forward into the 21st century.   Beyond the entitlement crisis, we still have to confront violent extremism, energy security, a totally outdated educate system, generations old infrastructure, a flawed and uncompetitive tax structure, and so on.  

I’m stunned that the Republican leaders aren’t doing more to dominate this issue with the boldest and most innovative ideas.  Congressman Paul Ryan is one of the only Republicans sticking his neck out to help shape the debate.  History is not kind to idlers.  We must do something.  

The left is afraid of this issue too.  Rock the Vote abandoned their spot at the summit because they thought it wasn’t slanted far enough left.  Note: Rock the Vote is supposed to be “nonpartisan,” but I’ve had my battles with them before.  The Nation is upset too.  Strategically it’s foolish to debate only with people who agree with you.  So conservatives have an opportunity.

There’s a menu of options that could be employed to confront these challenges, yet they aren’t at the forefront of national debate.  How much talk have you heard about minimum and maximum retirement benefits for different ages; eliminating tax burdens on senior citizens working after their retirement age; financial literacy; opt out savings programs; clinical effectiveness studies in health care; payment systems in health care; preventing and managing chronic diseases; VATs with corporate tax rate reductions; forcing votes and real budgeting on entitlement programs; and so many more options from the right and from the left?

Options exist but too little courage.  At the summit panelists eschewed generational warfare and victimhood in order to call for intrepidness and dialogue on this important issue.    

Ultimately, the debate will be shaped by who shows up.  In my humble view, this should be one of the top three issues of every major candidate for office, especially conservative ones because we hold ourselves to higher standards—at least, I had thought so.
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Michael P. Davidson is CEO of Gen Next, an organization comprised of executives and entrepreneurs committed to empowering individuals and causes to provide long-term solutions to challenges facing the next generation.  He has provided commentary for CNN, Fox News, MTV, NBC, KABC's the Al Rantel Show, Sacramento Bee, Houston Chronicle, San Francisco Chronicle, Los Angeles Times, California Political Review, and more. He has a BA from UC Berkeley.

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You can write to Michael Davidson (via the FR) here.