AUTHOR: Scott Bittle, Senior Fellow, Public Agenda
Dec 16, 2011

We’re all getting older. And we need to start dealing with it.

As a nation, we often act like our budget problems will go away once some specific policy crisis is over. You can hear this all the time, either expressly or implied, when politicians and commentators talk about the budget: “as soon as the economy recovers… as soon as the wars are over… as soon as the other party is out of power.”

But in fact, the biggest part of our fiscal challenge comes from long-term trends, changes in society that aren’t going to go away or that can’t be changed easily.

The Census Bureau laid out one of these trends in a report last week: Americans are getting older. People older than 65 are now the largest and fastest-growing part of the American population.

Specifically, the 65-and-older group is now 13 percent of the population, or 40.3 million in 2010. Overall, the number of seniors grew 15.1 percent since 2000. But the numbers do vary significantly depending on where you live. The Western states saw the fastest growth in the older population. The number of older people declined in just two places, Rhode Island and the District of Columbia.

This is a long-term, inevitable shift in the composition of the United States. Report after report, study after study, have concluded that there are two big factors behind our long-term fiscal problems. The aging of America is one of them, because more older people means more spending on Social Security and Medicare. Both programs are already spending more than they take in from payroll taxes, and are digging into the “trust funds” (which really means calling on the government to shift general revenues to pay these programs back what it owes). Unless we either raise taxes or revamp the programs to make them less costly, we’ll end up borrowing to cover their cost. That’s why these programs are the main reason the national debt will become unsustainable in the future.

The second big factor is that health care costs keep rising at about double the rate of inflation for everything else. That’s why Medicare is a much bigger challenge than Social Security, fiscally speaking. To fix that, we also need to tackle the problems throughout the health care system. The new health care reform plan is supposed to address that, but if it doesn’t work, we’ll need to come up with something else. But at least, on paper, with the right policies, we can change the course of health care costs.

An aging population is another matter. We can’t change this trend. Nor can we fail to provide for our seniors. It would be wrong, and the American people won’t stand for it.

So what can we do? Deal with it. Pay for it.

For Social Security, at least, there are lots of not-particularly-complicated options to keep the system solvent and manage its impact on the overall budget. The options aren’t painless, it’s true: Paying higher taxes. Retiring later. Changing how benefits are calculated so that future retirees get less. But the sooner we pick our options, the easier it will be.

We can’t change the trend. We can only change how we respond to it. And ignoring it is not an option.

Scott Bittle is a senior fellow at Public Agenda, a partner in Choosing Our Fiscal Future. With his colleague Jean Johnson, he’s co-author of “Where Does the Money Go: Your Guided Tour to the Federal Budget Crisis” and “Who Turned Out the Lights? Your Guided Tour to the Energy Crisis.”