Leadership for America

Entitlements

STATEMENT OF PURPOSE

Entitlements are the greatest domestic challenge the nation faces. The middle class retirement programs, Social Security, Medicaid and Medicare, will cause federal spending to jump by half, from the historical average of twenty percent of the economy to thirty percent by 2033. This tsunami of spending is a major threat to limited government because it runs on auto-pilot with automatic increases locked in by each program’s governing laws. While other programs are constrained through annual budgets, entitlements get the first call on resources. Other goals such as defense or national security must compete for an increasingly smaller share of what’s left. This “locked in” spending is steadily undermining the economic future of younger generations who face a debt burden of $200,000. The moral and ethical challenge from the entitlement tsunami is undermining our democratic system as more Americans become dependent on the government and other priorities are automatically preempted.

We must change how we see the future and the incentives for action. This requires putting entitlements on a level playing field with other budget priorities through a long-term “discretionary” budget reviewed on a regular basis and automatic triggers which would keep spending within limits if Congress failed to act. Long-term costs of entitlement programs would be built into the annual budget process forcing Congress and the nation to consider whether younger generations can afford to pay for new benefits for retirees. Entitlements or social insurance, must be transformed away from subsidized benefits to everyone regardless of need, towards real insurance where the government spreads risk and protects people against unexpected and devastating occurrences. Individuals must also assume a greater role for their foreseeable retirement needs through personal savings and insurance. These urgent steps will ensure a fiscally sustainable future and better stewardship for younger generations.

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OBJECTIVES

  1. 1. Show Americans the full picture of the federal budget—including long-term obligations from entitlement programs like Social Security, Medicare, and Medicaid—to generate public pressure for spending control.

  2. 2. Change the public’s view of entitlements and intergenerational obligations in the context of the long-term budget crisis so that Americans accept the need for structural changes to curb spending.

  3. 3. Convince Americans that raising taxes harms growth and jobs and is not the solution to expanded spending, while pro-growth tax reform is an important part of the long-term solution.

  4. 4. By the year 2017—through bipartisan support—halve the unfunded obligations for entitlement programs without raising taxes.

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Our Work on Entitlements

Experts From This Initiative

  • Stuart Butler, Ph.D. Stuart Butler, Ph.D.

    Stuart M. Butler, a nationally recognized architect of public policy, directs the Center for Policy Innovation. This new division of The Heritage Foundation is charged with designing the next generation of breakthrough ideas. Butler envisioned the Center for Policy Innovation, or CPI, as the “iPod division” of Heritage--a small, loosely structured group assembled to research and develop radically innovative solutions to some of America’s toughest challenges. “Think of CPI as a think tank within a think tank,” Heritage President Edwin J. Feulner said in announcing the division. “It will be a freewheeling research laboratory dedicated to thinking ‘outside the box’ to devise landmark policy recommendations consonant with time-tested, conservative principles.” Before taking the helm of CPI in August 2010, Butler guided Heritage’s domestic policy research for almost 30 years. As vice president for domestic and economic policy studies, he helped shape the debate on critical issues from health care and Social Security to welfare reform and tax relief. Butler, who remains on Heritage’s senior management team, sees the Center for Policy Innovation as a mechanism for assembling “virtual think tanks,” each dedicated to addressing a seemingly intractable problem. An early project, he said, will be “breaking the congressional paralysis” on solving the federal government’s long-term fiscal crisis. He plans to form specialized teams of policy experts from think tanks, academia and the private sector to come up with creative solutions. He expects to assemble political scientists, game theorists and others to devise strategies and legislative procedures to break the impasse. Butler has a reputation for developing transformative ideas that attract bipartisan support. “Stuart is rightly regarded as the father of enterprise zones and one of the intellectual prime movers behind welfare reform and the school choice movement,” Feulner said. “These ideas have helped reshape America for the better, and they exemplify the kind of groundbreaking work we expect from the new center.” By the 1980s, National Journal, Washington's premier magazine of politics and policy, had named Butler as “one of 150 individuals outside government who have the greatest influence on decision-making in Washington.” He remains in the thick of the action. National Journal recently noted Butler's influence once more, calling him one of Washington’s 12 “key players” on health care. In the debate over President Obama’s health proposals, Butler and other Heritage experts argued for an alternative based on consumer choice and state-led efforts, not federally directed ones. That effort continues. In health care as in other areas of policy, Butler has been a leading proponent of reaching across the ideological spectrum to find bipartisan ways to achieve reform. For instance, Butler and Henry Aaron of the Brookings Institution authored a major article encouraging some of the most liberal members of Congress, as well as some of the most conservative, to craft House and Senate bills to foster bold state initiatives for reducing the number of uninsured Americans. Butler has been published in leading newspapers, including The New York Times, as well as in leading academic journals such as Journal of the American Medical Association, New England Journal of Medicine and Health Affairs (where he is a member of the editorial board). He has testified before Congress dozens of times, been the subject of a profile in The Washington Post, and appeared as a guest commentator on all of the major television networks. In recent years, Butler became a regular speaker on the Fiscal Wake-Up Tour. He joined a team of nonpartisan, ideologically diverse budget realists who traveled the country seeking to build public support for tackling the growing threat posed by runaway federal spending on the “Big Three” entitlement programs--Medicaid, Medicare and Social Security. Featuring former U.S. Comptroller General David Walker and experts from Heritage, the Brookings Institution and the Concord Coalition, the Fiscal Wake-Up Tour visited dozens of cities to meet with editorial boards, business leaders, academics and town hall gatherings of regular citizens. Even before the recession took hold, regional and national media--including CBS’ 60 Minutes--devoted attention to the effort. Butler joined Heritage in 1979, when it was a relatively obscure conservative think tank, as a policy analyst specializing in urban issues. His first widely recognized policy proposal was the concept of “enterprise zones” to encourage development in blighted neighborhoods. How? By offering tax and regulatory relief to entrepreneurs who were willing to start businesses there. Butler introduced the idea in an early paper for Heritage. It caught the attention of then-Rep. Jack Kemp (R-NY), who co-sponsored legislation implementing the concept with then-Rep. Robert Garcia, a Democrat from the South Bronx. Today, at least 70 zones exist in cities across the country. Butler grew up in Shropshire, in the west midlands of England. The son of a mechanic who left school at age 13, he says his modest roots strongly influenced both his personal values and his approach to policy. True, he holds bachelor’s degrees in physics and math, and also economics, as well as a doctorate in American economic history from the University of St. Andrews in Scotland. But Butler believes that empowering ordinary people--not experts or government officials--is the best way to solve social problems. Butler became a U.S. citizen in 1996. In his early days as a policy analyst, he visited tenements in the South Bronx and Washington, D.C., to discuss with residents how best to address the festering problems of public housing. The encounters led him to help design such approaches as tenant ownership and school choice. Butler’s abiding passion is health care reform. He has argued for a restructured system based on consumer choice and state-led innovation. In 1989’s “A National Health System for America,” Butler and Heritage colleague Edmund F. Haislmaier wrote a groundbreaking explanation of how distortions in the tax code created a health care system that denies individual choice and drives up costs. When President Clinton began his bid to federalize health care upon taking office in 1993, Butler was one of the nation’s most-quoted experts on why the Clinton proposal wouldn't work. But he also consulted with lawmakers to develop an alternative reform. At the time, liberal pundits were among those who thought the Butler approach was superior. Michael Kinsley, then editor of The New Republic, called it “the simplest, most promising, and in an important way, the most progressive idea for health care reform.” In addition to dozens of research papers for Heritage, Butler has edited several books and is the author of three: Enterprise Zones: Greenlining the Inner Cities (1981), Privatizing Federal Spending (1985) and--with Anna Kondratas--Out of the Poverty Trap (1987). In 2002, he accepted an invitation to spend a semester as a fellow at Harvard University’s Institute of Politics. He currently is an adjunct professor at Georgetown University Graduate School. Butler, who is married and has two children, resides in Washington, D.C....

  • Alison Acosta Fraser Alison Acosta Fraser

    As Director of the Roe Institute for Economic Policy Studies, Alison Acosta Fraser oversees Heritage Foundation research on a wide range of domestic economic issues including federal spending, taxes, energy and environment, retirement savings and regulation. One of the Roe Institute's priorities is reform of the federal retirement programs – Medicaid, Medicare and Social Security. Under Fraser's leadership, Heritage research has helped define and communicate the long-term fiscal threats from spending and taxes and identify solutions and proposals for reforms. Fraser is a member of the Fiscal Wake-Up Tour, designed to educate Americans about the nation's true long-term financial condition and large and growing fiscal imbalance and to encourage Americans to demand action. The tour conducts of town hall forums, business roundtables and editorial board briefings across the country. By uniting with analysts from across the political spectrum on the Fiscal Wake-Up Tour, Heritage hopes to encourage the spirit of bipartisan honesty and discussion that will be necessary to preserve the strength of the American economy for posterity. Unless Congress fundamentally recasts Medicaid, Medicare and Social Security, Americans within two generations will be saddled with European levels of taxation and economic stagnation. Sponsored by the Concord Coalition, the tour features experts from Heritage, the Brookings Institution and U.S. Comptroller General David Walker. The tour of budget and fiscal experts has visited nearly two dozen cities in since its inception in the fall of 2005. Fraser is one of those touring fiscal experts and she carried that same message direct to journalists in 2006, highlighting two National Press Foundation budget seminars for West Coast reporters. Following Hurricane Katrina, she took the lead in preparing Heritage's comprehensive special reports on disaster recovery. These reports were the first and only such policy works published in the weeks following the disaster, making Heritage a leader in solutions on Capitol Hill in the media.Fraser has appeared on all CNBC, CNN, FOX and MSNBC news channels, Bloomberg, PBS and the BBC. Her commentaries on fiscal issues have appeared in the Atlanta Journal-Constitution, the Philadelphia Enquirer, National Review Online, Washington Times and USA Today. Before joining Heritage in 2003, Fraser was Deputy Director of the Oklahoma Office of State Finance where she directed economic research and developed tax and fiscal policy recommendations for then-Gov. Frank Keating. Prior to that, she was a budget manager for Orange County, Calif., where she developed recommendations for bankruptcy recovery....

  • J.D. Foster, Ph.D. J.D. Foster, Ph.D.

    JD Foster is the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy at The Heritage Foundation. His primary focus is studying long-term changes in tax policy to ensure a strong economy. He also examines changes in Medicare, Medicaid and Social Security so they are both affordable and more effective. Foster came to Heritage in 2007 after serving many years at the White House, the Executive Branch, Capitol Hill and private policy institutions. His last job before joining Heritage was at the White House's Office of Management and Budget, where he was Associate Director for Economic Policy. While there, Foster led the office's economic policy staff and advised three Directors on developments in the economy and potential changes in economic policy. He was also the chief adviser to the Director on matters of tax policy and led the OMB team in the Administration's "Troika" economic forecasting process. In addition, he played a leading role in the development and advancement of the Administration's pension and private health care policies. Before joining OMB in June 2002, Foster served at the Treasury Department, where he was Senior Adviser in Economics at the department's Office of Tax Policy. He also advised the Assistant Secretary on issues concerning the 2001 tax cut, the 2002 tax stimulus bill, reform of the tax expenditure presentation in the President's budget, simplification, and options for tax reform. On Capitol Hill, he was the Legislative Director for Rep. Philip M. Crane (R-IL), then Vice Chairman of the House Ways and Means Committee. Before that, he was the Executive Director and Chief Economist at the Tax Foundation, a Washington, D.C.-based research and education institution. While at the foundation, he saw its research program and reputation restored, a variety of new education programs instituted, and its debt retired. He also was Chief of Staff to Chairman Michael Boskin at the President's Council of Economic Advisors at the White House. Prior to joining the Council of Economic Advisors, Foster was: Economic Counsel to Sen. Steve Symms (R-ID) and working on the Senate Finance and Budget Committees, 1991. Staff Economist at the Senate Republican Policy Committee under Sen. Don Nickles (R-OK), 1991. Economic Counsel to Sen. William Armstrong (R-CO) and working on the Senate Finance and Budget Committees, 1989-1990. Staff Economist at the Institute for Research on the Economics of Taxation, 1985–1989. Foster received his doctorate in economics from Georgetown University, his master's degree in economics from Brown University, and bachelor's degrees in economics and mathematics from the University of Colorado. ...

  • Rea Hederman, Jr. Rea Hederman, Jr.

    Rea S. Hederman Jr. is Assistant Director of The Heritage Foundation's Center for Data Analysis (CDA), where he is also Senior Policy Analyst. Hederman's responsibilities include managing CDA's work on legislative analysis and Social Security. He also provides statistical analysis and econometric modeling for key Heritage policy initiatives, among them poverty, income inequality, taxes and welfare. Hederman is a founding member of the Center for Data Analysis, which Heritage created in 1997 to provide the public policy community with state-of-the-art modeling, database products and research assistance. CDA's team maintains scores of databases to support strategic research; provides confidential reviews of legislation for members of Congress and the White House; and supplies data and analysis for news organizations. The Census Bureau, Internal Revenue Service, Social Security, Medicare and Department of Education are only a few of the agencies and programs included in the databases. CDA's peer-reviewed analytical models shed critically important insight on how policy changes affect social and economic systems. Hederman's commentaries have appeared in The Washington Times, The Washington Post and FOXNews.com. He is quoted by major newspapers and wire services and appears regularly on such cable news outlets as CNN, FOX, CNBC and MSNBC. Hederman, who joined Heritage in 1995, is a graduate of the University of Virginia with bachelor's degrees in history and foreign affairs. He has a master's in public policy from Georgetown Public Policy Institute. He and his wife Caryn, an attorney, live in Alexandria, Va. They have two children. When not reading public policy papers, Hederman enjoys cooking for his family and trying to teach his boys how to play guitar....

  • David C. John David C. John

    David John is one of five experts who "exert more influence" on the Social Security debate than anyone else in Washington – and he is The Heritage Foundation's lead analyst on issues relating to pensions, financial markets and institutions, banking regulation, asset building, and Social Security reform. In 2006, John lived up to this title, given to him by Congressional Quarterly, by working with Brookings Institution scholar J. Mark Iwry to come up with a "third way" to promote retirement self-reliance: the Automatic IRA. Their approach would encourage most workers not covered by an employer-sponsored retirement plan to build their own low-cost, diversified individual retirement accounts. It would work much like a direct paycheck deposit to a bank account – a feature now common in the American workplace. Unless workers choose to opt out, they would be automatically enrolled in the generic savings program, with a pre-set contribution rate and diversified investment portfolio. The contribution amount and portfolio selection could be adjusted by workers to meet their individual needs. This approach would let workers accumulate pre-tax retirement savings in every job they hold, even when their employers offer no such benefit of their own. This is just one of John's many professional achievements. Since coming to Heritage in 1998, he has written and lectured extensively on the importance of reforming the nation's retirement system. During this time, he has testified before a number of House and Senate committees on subjects ranging from Social Security and pension reform to improving the nation's flood insurance program. In 2001, he testified before President George W. Bush's Commission to Strengthen Social Security, providing detailed analysis of how personal retirement accounts could be structured and regulated. John also testified before the House Budget Committee's Task Force on Social Security, explaining what the costs of transitioning to a system of Social Security personal retirement accounts might be as compared to the cost of running the current program. In addition, John has testified before the House Ways and Means Committee on issues such as steps that should be taken to improve Social Security for women and minorities, how to increase the information that the public can receive about Social Security programs, and how the United Kingdom's pension system operates. He also testified before both the Senate Special Committee on Aging and the House Education and the Workforce Committee on proposals to strengthen the funding of defined benefit pension plans. John has been published and quoted extensively in many major publications, including The Wall Street Journal, Financial Times, Washington Post, New York Times, Chicago Tribune, Los Angeles Times, Philadelphia Inquirer, Washington Times, Forbes, Business Week, and USA Today. He has also appeared on CBS News, NBC News, CNN, MSNBC, the Fox News Channel, BBC radio, and many other national and syndicated radio and television shows. John came to Heritage from the office of Rep. Mark Sanford (R-SC). He was the lead author of Sanford's plan to reform Social Security by setting up a system of personal retirement accounts. His Capitol Hill service also includes stints in the offices of Reps. Matt Rinaldo (R-NJ), and Rep. Doug Barnard Jr. (D-GA). While working for Barnard, John helped write one of the first bills that would have eliminated restrictions on banks to sell securities and insurance. He also authored a bill in 1981 that restarted the national commemorative coin program. In the private sector, John was a Vice President at the Chase Manhattan Bank in New York, specializing in public policy development. In addition, he worked for three years as Director of Legislative Affairs at the National Association of Federal Credit Unions, and worked as a Senior Legislative Consultant for the Washington law firm of Manatt, Phelps & Phillips. John earned a bachelor's degree in journalism, an MBA in finance, and a master's degree in economics from the University of Georgia in Athens....

  • Brian Riedl Brian Riedl

    Brian Riedl is The Heritage Foundation's lead budget analyst and has built a solid reputation for interpreting, explaining and reforming the often arcane realm of federal budget policy. Indeed, much of the current backlash against runaway federal spending can be attributed to Riedl's work. As far back as 2002 and 2003, his writings exposed the beginnings of a federal spending spree that was pushing real federal spending to more than $20,000 per household for the first time since World War II. In December 2003, Riedl – Heritage's Grover M. Hermann Fellow in Budgetary Affairs – quickly revealed the omnibus spending bill's 8,000 pork projects, including funding for the Please Touch Museum and the Rock and Roll Hall of Fame. In 2006, the Senate increased President George W. Bush's war funding bill with $14 billion in unrelated domestic spending. Riedl's writings exposing this irresponsible spending, including Mississippi's "railroad to nowhere" received extensive media coverage, and the ensuing public backlash forced Congress to strip the $14 billion from the bill. In 2010, Riedl was named a recipient of the Forward under 40 award, presented by the Wisconsin Alumni Association to graduates of the University of Wisconsin-Madison who are "making a real difference" while still in their 30s. Riedl's budget research has been featured in front-page stories and editorials in The New York Times, The Wall Street Journal, The Washington Post and The Los Angeles Times. He has discussed budget policy on NBC, CBS, PBS, CNN, FOX News, MSNBC, and C-SPAN. He also participates in the bipartisan "Fiscal Wake-Up Tour," which holds town hall meetings across America focusing on the looming crisis in Social Security, Medicare, and Medicaid. In addition to overall spending trends, Riedl targeted the 2002 farm bill, which distributed most of its $180 billion bounty to wealthy agri-businesses. In an op-ed essay published in dozens of newspapers nationwide, Riedl noted that "farm subsidies are America's largest and most expensive corporate welfare program." So effective were his criticisms that, weeks after the farm bill was enacted, the U.S. Agriculture Department felt it necessary to publish a 12-page report that tried to address many of the concerns Riedl had raised. Riedl also contributes to Heritage's welfare research. In an op-ed published in The Washington Post, Riedl wrote that "Welfare recipients assigned to immediate work see their earnings increase more than twice as fast over the following five years as those first placed in education-based programs." In another study, he debunked the myth of a child care crisis by showing that funding has more than tripled since 1996, leaving very few truly needy families without access to child care assistance. Before coming to Heritage in 2001, Riedl worked for then-Gov. Tommy Thompson, former Rep. Mark Green (R-WI)., and the Speaker of the Wisconsin Assembly. Riedl holds a bachelor's degree in economics and political science from the University of Wisconsin, and a master's degree in public affairs from Princeton University....

  • Nicola Moore Nicola Moore

    Nicola Moore is Assistant Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Moore advances Heritage's conservative solutions to economic challenges through research and analysis, focused primarily on the rising cost of the major entitlements - Medicare, Medicaid and Social Security. Moore also reviews publications on a wide range of economic issues and oversees specific projects within Heritage's domestic and economic policy center. One such project is the Federal Revenue and Spending Book of Charts, which provides a wealth of downloadable and shareable graphics on government spending and taxes. She previously was a state policy analyst at Americans for Prosperity, a Washington-based grassroots group that advocates free markets and limited government. Before that, she served as education director of Students for Saving Social Security, which mobilizes young Americans to the cause of policy reform. She researched entitlement policy and wrote for college audiences on the subject of personal retirement accounts. Moore holds bachelor's degrees in economics and philosophy from Boston University and a master's degree in philosophy of public policy from London School of Economics, all with honors. A resident of Washington, she is pursuing a master's of business administration at Georgetown University. ...

  • Curtis Dubay Curtis Dubay

    Curtis Dubay is a Senior Policy Analyst at The Heritage Foundation, where he specializes in tax issues. Before coming to Heritage in November 2008, Dubay was a Senior Associate at PricewaterhouseCoopers in Atlanta, where he structured international transactions as part of the accounting firm's Transfer Pricing Group. Dubay previously served as a Senior Economist for the Tax Foundation, where he authored three widely recognized and cited reports: "Tax Freedom Day," "State-Local Tax Burdens" and "The State Business Tax Climate Index." (Tax Freedom Day refers to the date on which Americans at last have earned enough income to pay the nation's total income tax bill for the year.) Dubay has done research on the details of a wide range of taxes, among them income, sales, capital gains, dividends, corporate, excise and international. He has testified to state legislatures about how to improve their tax climates. Such newspapers and periodicals as The Wall Street Journal and Forbes have quoted his views. Dubay received his master's degree in economics from the University of Connecticut in 2004. He also has a bachelor's degree in economics and leadership studies from the University of Richmond. He lives in Washington, D.C....

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