Reforming entitlement programs and promoting job growth are the two key issues for getting the federal government back on track, U.S. Sen. Roy Blunt told people at Washington City Hall Friday, Dec. 2.
Blunt said entitlement programs including Medicare and Social Security both need to be looked at.
“This year, for the first time ever, all of the money that came in, 101 percent, went to entitlement programs,” he said.
Blunt’s claims don’t mesh with federal budget offices, however.
According to the 2010 federal fiscal year, the government generated $2.2 trillion in revenue from Social Security, corporate and individual income taxes, and other sources.
About $2.03 trillion of the nation’s $3.5 trillion in expenses during the same fiscal year went toward entitlement programs, according to the White House Office of Management and Budget.
Those programs include Social Security, Medicare and Medicaid, unemployment and other entitlements.
“That means we borrowed money for everything else,” Blunt said.
He said those sort of spending issues should be solved by Congress now, when the House and Senate are split, because responsibility is shared.
Blunt said not reining in spending was “one of the real missed opportunities during the past year.
“They aren’t hard to solve. They’re just hard to solve if no one takes responsibility,” he said.
Worth noting is that $865 billion in Social Security taxes were collected with only $701 billion spent, according to the Congressional Budget Office.
Medicare and Social Security spending is forecast to increase dramatically in the coming years, however, as the number of persons enrolled, and the overall cost of health care, rises rapidly.
There is no 2011 federal budget, as Congress didn’t pass President Barack Obama’s proposed budget for the fiscal year, which ended in September.
The 2012 budget, which Blunt said is beginning to make its way through Congress in a series of appropriations bills, shows $2.6 trillion in estimated revenues and about $3.7 trillion in spending.
Social Security, Medicare, Medicaid and unemployment, welfare and other programs make up $2.1 trillion of that.
The breakdown of those requested funds and the percent change from the 2011 requested, but not enacted, levels is:
Social Security, $761 billion, up 2.6 percent;
Medicare, $485 billion, down 0.6 percent;
Medicaid and the State Children’s Health Insurance Program, or SCHIP, $269 billion, down 2.5 percent; and
Unemployment, welfare and other mandatory spending, $612 billion, down 14 percent.
Blunt said politicians have been using tried-and-true tactics of telling people their Social Security benefits are at risk.
Saving the system is doable, he said.
“You can move two or three moving parts and save it,” Blunt said.
Some of those moving parts could include raising the retirement age and contribution rates, including for the wealthy, he said.
Blunt said the national debate on the issue has taken off as those in positions of power realize the “inevitability of the way things are going.”
In order to support those entitlement programs, people need jobs.
Mark Wessels, Washington Area Chamber of Commerce president, said Washington leveraged about $3 million in grants to create 120 jobs this year.
That money could be recaptured in only a few years, he said.
That was done with stimulus funds, Wessels said.
“But stimulus has now become as bad a word as earmark,” he said.
Blunt said there wasn’t a lot of job creation in the federal stimulus program, also known as the American Recovery and Reinvestment Act of 2009.
“The federal government can do very little to create private-sector jobs,” he said.
Blunt said the stimulus money instead went to keep people on the job for another year.
“It was money foolishly spent in a lot of cases, but I am a supporter of well thought-out infrastructure,” he said.
Another way to increase revenues would be to pass a tax bill on Internet sales.
Blunt said currently people are supposed to self-report purchases made online.
Sometimes the only reason people are buying products online instead of locally is because the items are 7-10 percent cheaper because there is no sales tax, he said.
While the bill was filed last month has been getting some criticism, the Marketplace Fairness Act “has a chance,” Blunt said.
Blunt is backing the bill, along with other senators from both parties.
The bill would create a system for local and state governments to force online retailers to collect the taxes.
Blunt said previously that the bill wouldn’t create a new tax, simply enforce existing taxes.
The lack of collections results in a loss of about $23 billion for state and local governments nationwide each year.
The bill would allow small retailers making less than $500,000 in Internet sales annually to not collect the taxes.
The largest Internet retailer, Amazon.com, endorsed the bill earlier this year.
“This is just a fairness issue,” Blunt said. “I’m pleased to be for it.”