Elephant in the Room: Budget Wish Lists Come and Go, But 'Entitlements' Outweigh All; They Cost $3 Billion a Day, Rise 8% a Year, Leave Bush Little Room to Maneuver; Coming Soon: Baby Boomers
President Bush on Monday will tell the nation what he wants done with the budget next fiscal year. But the significance of his proposals and Congress's response is dwarfed by one daunting fact: Some 84 cents of every dollar the government spends is essentially committed before he and the legislators even have at it.</br></br>That is the amount that goes to three all-but-untouchable elements: interest on the federal debt; defense and homeland security; and, above all, "entitlements" programs such as Medicare, Medicaid and Social Security.</br></br>It leaves just one-sixth of spending for nearly everything else the government does domestically, from secretaries' salaries to research -- what is known in budget jargon as "discretionary" spending.</br></br>Entitlements are the real elephant in the room. Formulas for spending on these social programs are set by law. Anyone eligible can collect. And the programs are growing far faster than either inflation or the economy, some 8% a year.</br></br>Medicare, at $391 billion this year, is close to equaling the entire domestic discretionary slice of the budget. Add in Social Security and the federal share of the state-run Medicaid program for the poor, and the big-three entitlements total $1.1 trillion for this year -- $3 billion a day. This spending is the big issue in the federal budget, not post-Katrina rebuilding, headline-grabbing pork like Alaska's ridiculed bridge to nowhere, or even the costly war in Iraq.