Generational Warfare

Author: Editorial

Published: December 9, 2003

YESTERDAY PRESIDENT Bush signed into law the most significant reform in the history of Medicare. With the stroke of a pen, he created a new entitlement, promising that the federal government will pay for $400 billion worth of prescription drugs for seniors over the next decade, a figure that could rise to $2 trillion in the subsequent 10 years. At the signing ceremony, the president congratulated himself for making this promise: "Each generation has a duty to strengthen Medicare. And this generation is fulfilling our duty."

Indeed, for President Bush's generation -- the baby boomers, born in the decades after World War II -- this bill represents a great achievement, because it will add to their bank balances well into the future. But for the baby boomers' children and grandchildren, who will be paying the tax bills, it represents real financial loss. For proof, look no farther than the comparative figures put together by the Congressional Budget Office at the end of the 1990s, and analyzed by Eugene Steuerle and Adam Carasso of the Urban Institute. These show that the federal government was spending about a third of its budget on the elderly at the beginning of this decade, more than four times what it spent on children. With the new Medicare expenditures, the gap will become even more dramatic.

Indeed, even taking into account the new child tax credit, the gap between federal expenditures on the elderly and on children, as a share of the national economy, is striking, as Mr. Carasso's graph shows. If no dramatic changes are made to programs that affect children, including welfare, Medicaid and federal aid to education, spending on children is projected to stay flat, at about 2 percent of gross domestic product. Spending on the elderly, by contrast, including Social Security and the new Medicare prescription drug benefit, will rise from 8 percent of GDP to more than 10 percent by 2013.

Admittedly, if these figures included state and local spending, the gap would narrow, because schools are mostly funded at the local level and Medicaid and welfare are partly funded by states. Nevertheless, they accurately reflect the priorities of national politicians. When given the choice, successive Congresses and administrations have consistently chosen the old over the young, though poverty and a lack of health insurance are now more prevalent among children than among the elderly. Politics is about winning votes, of course; children don't vote and young people don't give big campaign donations. But votes notwithstanding, politicians often speak of "our children" and "our future." In the case of this Congress and this president, we now know exactly what that kind of talk is worth.