Chairman Price Calls for Restoring the Trust for All Generations

American Action Forum's "Rising to the Challenge: The Need To Fix Entitlement Programs"

Remarks as prepared for delivery

Thank you Doug Holtz-Eakin and the American Action Forum for the invitation to be here today and for putting this event together. To all of you in the audience and the panelists, thank you for your interest in this important debate and your willingness to be a part of it.

You don’t have to spend your spare time leafing through actuarial reports and Congressional Budget Office analyses –– in order to understand that our nation’s health and retirement programs – Medicare, Medicaid and Social Security – are in financial trouble. With 10,000 baby boomers reaching retirement age every day, the structure of these programs is simply unsustainable. This means they will not be sustained!

By the time a child born today is able to vote, the Social Security trust fund will be insolvent. When today’s preschooler enters college, the Medicare trust fund will be insolvent. When today’s Kindergartner enters the workforce, he or she will be required to finance nearly half a retiree’s Social Security and Medicare benefits all by themselves.

And then there’s Medicaid. In 2014, more than 45 million individuals relied on Medicaid or the State Children’s Health Insurance Program for their health care. But enrollment in Medicaid and SCHIP no longer guarantees access to the doctors or treatments folks need. In too many instances, it’s health coverage – without the health care.

When you add Obamacare to the entitlement mix, federal spending on health care alone – Medicare, Medicaid and the ACA – is projected to approach $2 trillion annually in the years to come. That will eat up a sizeable and growing portion of annual tax revenue – crowding out other necessary spending, including defense.

These are the facts, and there’s no way around them.

But, believe it or not, there are a good number of folks who say this isn’t a problem – at least, not an urgent one. They read the same reports. They can all do the math. But, for a whole host of reasons, they tend to do what’s comfortable right now, and has been public policy for years, which is to ignore the problem and downplay the consequences.

Or they say we just need to raise taxes to cover any funding gaps. Or borrow more money and mortgage our children’s future, throwing the burden to other generations.

But every dollar the government takes out of the pockets of hardworking Americans is money that is not available for a family to support a child’s education, to pay a mortgage, buy a new car, pay the rent, or take a family vacation. Every dollar the government borrows drains the pool of savings that would otherwise be available for investment in the long-term prosperity and economic opportunity of our nation. 

This harm to growth and job creation compounds the fiscal challenges in our health and retirement programs. Medicare and Social Security were never designed to shoulder the entire weight of an individual’s retirement. But in an unhealthy economy, individuals and families are less able to grow their own nest egg and are increasingly reliant on government assistance – which increases the burden on these programs.

This cycle of uncertainty and economic pain impacts all of us in one way or another. As Medicare, Medicaid, and Social Security run toward insolvency, current seniors, future seniors, and the working families who pay for today’s benefits will face the consequences – that’s all of us.

Thankfully, this can be avoided, but only if there is a critical mass of support for reform. Whether or not we can achieve that critical mass is, at the moment, almost as important as the policies that might be adopted to put these programs on a path to solvency.

That is why we at the House Budget Committee are working on a project to shine a light on the need to ensure health and retirement security for today’s seniors and tomorrow’s retirees. Our goal is to restore the trust for all generations, by motivating our colleagues and the American people to get involved – to engage our fellow citizens in a discussion and build consensus toward positive solutions.

In typical budget fashion, we aim to put the nation on sound fiscal footing. That in and of itself is a tremendous challenge. However, we are not simply interested in just making the numbers on a page add up.

We want to restore the trust of the American people by saving, strengthening, and securing these programs – making them more responsive to the needs of beneficiaries. We want to look beyond just the big three and also focus attention on other mandatory spending programs – financial support programs, food stamps and educational assistance to name a few. Our goal is to end the immoral practice of forcing more Americans into dependency on broken programs.

To achieve this goal, we have to win the argument. To win the argument, we have to humanize the challenge and let folks know that, whether they believe it or not, they are invested in the success of these programs – whether as beneficiaries themselves, a family member to a beneficiary, a working-age individual paying a portion of their paycheck to fund the programs or anywhere in between. 

Those who oppose our reform efforts have been putting a human face on these issues for a long time. You all might remember in the last presidential election, President Obama’s team created this interactive online character named Julia and they built a website that chronicled Julia’s life and all the wonderful things they said the government would do for Julia.

It was a remarkably telling example of the Obama Administration’s vision for America – a cradle to grave state of government influence in one’s life. Conveniently absent from the story is of course all those folks – including Julia – who are paying for these programs – and the fact that, while she may retire and be eligible for Social Security and Medicare in her 60s, she will be one of the millions of seniors who spent a lifetime paying into a program that went bankrupt long before she was able to utilize it.

That’s the type of misleading characterization we are up against. Our critics try to claim the moral high ground. They say they are the ones looking after our seniors and those less well-off. But where’s the morality in committing seniors and low-income families to a health care system that cannot deliver – or which intrudes on the personal decisions of patients and their doctors? Is it moral to promise retirement security that the government knows it cannot provide? As policy thinkers and policymakers, achieving real, substantive improvements to the nation’s health and retirement programs will require showing that the status quo, do-nothing crowd are the ones acting recklessly and leaving the American people in a terrible situation.

In many ways, Republicans have already made tremendous strides with the Medicare reforms we have proposed in the House Republican budgets for the past several years. We have begun to normalize the issue and debate, so that it is acceptable to broach the topic of reform.

To see good ideas become good legislation and eventually good laws, we have to build a coalition around support for positive solutions. What might that coalition look like?

Here’s a hint: it’s not just folks who want to balance the nation’s budget. I’m one of those folks, and I was proud that Congress adopted our balanced budget plan this year. But we have to take a message of reform to those who might traditionally see any change as an assault on their benefits and show that the true assault comes from doing nothing. And it cannot be something we just talk about during budget season. We must continually engage on this front.

The danger to beneficiaries is not coming from those of us trying to improve the programs; it is coming in a few short years when Medicare and Social Security go bankrupt. Or, for those on disability insurance, as soon as next year.

So we need a coalition that is made up of Americans who believe in – again – saving, strengthening, and securing these programs. After all, even if Medicare and Social Security were on sound fiscal footing, which they are not, seniors would still benefit from expanded choices to ensure a healthier and more secure retirement. Medicaid would still be in dire need of improvements to ensure recipients actually have access to physicians. Income assistance, food stamps and other welfare programs would still benefit from efficiencies giving communities greater control and flexibility to tailor the programs to meet the needs of their citizens. Milton Friedman noted “One of the great mistakes is to judge policies and programs by their intention rather than their results.” When we look at the results, we know that we can’t simply preserve these programs; we must improve their policies so they better serve the American people. This is a moral imperative.

My goal here today is not to simply reinforce what you already know. It is to enlist you and your friends, others who might be tuning in to this conversation, to become a part of a concerted effort to restore the trust in these programs, in the goal of health and retirement security, in the goal of helping others shift from government assistance to independence, financial security and economic opportunity.

We purposely are not coming forward with a slate of legislative solutions – so as not to pre-determine the outcome of a healthy and honest debate – except to say that if we fail to motivate our fellow citizens and empower them to face these challenges, America’s health and retirement programs are destined to go broke – breaking the solemn promises we have made to each other.   

So we come with principles – principles that speak to the character of the American people; to our belief in the individual; to expanding choices and encouraging innovative thinking; to restoring market forces and engaging the spirit of federalism.

These principles will form the foundation of this campaign – Restoring the Trust for All Generations.

Success in this endeavor will not come quickly. The enormous challenges facing our nation’s health and retirement programs have grown over decades. Those who would demagogue our efforts have spent years refining their attacks – and are well entrenched and invested in the broken status quo. With every passing day, our work gets more challenging. So we need both a sense of urgency and a healthy perspective that we should be willing to accept even incremental progress along the way.

I hope you and your colleagues, your friends and family members will see the value in participating in this effort.

As I said at the outset, we really don’t have a choice. Even if you think you’ll be well on your way to achieving financial independence in your retirement years and will find no real use for the government’s assistance, you are still paying for it. And the economy you live and work in is paying for it. And, compassion for our fellow citizens ought to compel us to at least see the wisdom in ensuring millions of Americans are not left out in the cold, when we could have saved and strengthened these programs when we had the chance. This is the most predictable fiscal crisis our nation has ever faced.

If we make responsible decisions today, if we do not shy away from the tough challenges – but instead embrace this opportunity we will be able to foster a nation where the greatest number of Americans have the greatest opportunity to realize their dreams and to achieve the greatest success for themselves and their families with a more prosperous and secure future – that’s a pretty good goal.

You can learn more about the House Budget Committee’s efforts by going online at budget.house.gov/RestoringTheTrust. There you will find additional information including a white paper the committee has produced that dives deeper into these issues – providing greater detail about the challenges we face and the principles needed to solve them. We plan to update the site as we move forward and we are actively soliciting input from the public in this effort.

Thank you again to Doug, AAF and everyone here today for your time. I look forward to taking your questions and continuing this conversation.