Today the bipartisan Commission on entitlements and tax reform was expected to propose some big changes in the way the government spend its money the group if you haven't heard about it was appointed by President Clinton and has been working under the leadership of Democratic. Senator Bob Kerrey of Nebraska and Republican senator, John Danforth of Missouri. All the sacred cows were on the table Social Security Medicare and other so-called entitlement programs these programs account for more than half of what the government spends in are the biggest obstacle to a balanced budget in the long-term. And apparently this morning said her to carry said the commission may fail to pass a comprehensive list of specific proposals and may just approval letter to President Clinton the same there are few easy and popular decisions and issue a call for tough action. Carrie and Dan for say they are still hoping to reach agreement on some general principles. Well, I guess during this hour knows quite a bit about the budget deficits entitlements money the whole ball game or I can do it lingers theFounder of the Minnesota chapter of the Concord Coalition the nonpartisan group devoted to dealing with the federal deficit. She has President of Niger Capital Management in the Twin Cities. And of course is familiar to many Minnesota Public Radio listeners as a regular star, Minnesota Public Radio sell MonDay program. Thanks for coming in a weekday Erica. I'm delighted to have a question about entitlement spending Social Security Budget reform or like this one too. If you have your own idea on how to make the big cuts were going to talk about that little bit because of gun is a video game out that that you can play and you can put your recommendations in a take a stab at it. Will Erica I guess it is pretty tough to come up with some recommendations of looks like this the bipartisan Commission on entitlements. The tax reform is knocking up coming up with any recommendations. And what's what's the other day. Isn't that tough to actually come up with some suggestions. Apparently it would have been done long ago politicians are absolute.Terrified of their constituents that they'll get voted out of office if they really vote to do something about entitlements and the deficit what's terrifying about this. Is that the things that the Carrie Danforth commission was talking about? We're Loki small incremental changes. These were not designed to eliminate the federal budget deficit at all. They were not designed to fix Social Security anytime in the near future. There were Provisions like gradually raising the retirement age that they were talking in about phasing in over 50 years and that wouldn't have a full impact on people unless they were under the age of 28 and in this is the biggest richest country in the world and we can't fix the problem like this in less than 50 years. So it's apparently that killed it in the AARP Lobby in the AFL-CIO. We're very big on this and I do want to emphasize her they weren't talking about touching current social.Dirty benefits at all or near-term benefits. They were just talking about very long-term incremental changes for distant future retirees are going to disband I would assume so I wonder what's what's the next step now, is it is it going to be Now, is it going to go to Congress while on their hands and to go without the recommendations? Apparently the Republicans have been doing a little bit of a same thing and talking about how to pay for the contract for America will unspecified budget cuts or hoping that revenues will increase because of tax cuts in the future, which is what we did back in the early 1980s and didn't work then so this is at this is Bleak in terms of near and long-term outlook for the economy. It's really really bad news. Our first call is Max from Minneapolis, Minnesota Public Radio. Thank you. My question is and listening to the debate in many places. What is the actual percentage of the federal budget ofEntitlements like Medicare and Medicaid in relationship to the percentage of the budget for defense spending at all, in terms of total federal government spending Social Security is 21% Medicare is 10% Medicaid is 6% And if we look at other major benefit categories defense spending is about 19% and interest on the national that's about 15% So total entitlement spending is a little over half of government spending. The rest is fairly equally divided among the fence interest on the national debt and all other areas of government everything that we normally think of his is government Senator. Kerry said and I wonder if he's he said that the weather for a fiscal Trainwreck is this alarm?Is going to start going up again in a year or two and it's going to go just relentlessly upwards. It is increasing the national debt, which is the accumulated deficits. The money that we owe is increasing in real terms if the national debt is growing faster than the economy. So it's increasing in real terms in and just to give us the best example of what I consider the real train wreck demographics. The baby boom population are about 76 million baby boomers who will start to retire in 15 years. I'll reach age 65. I've known fact the outside. 6550 year olds today and if we keep doing what we do it wait what we're currently doing if we keep current levels of Social Security Medicare and so on and we keep tax rates where they are today children being born today will end up paying net lifetime tax rates of 82% of their income.Now that compares to a rate of 34% for Boomers currently in a rate for the veterans of World War II vet generation of about 29% So you're tracking 82% of their incomes will go to pay primarily for the entitlements for this huge lump of Baby Boomers and the social security system up there. So many phrases that are tossed around about that are totally erroneous people do not have individual Social Security accounts in Washington Social Security simply keeps track of wages. They don't keep track of how much individuals are paid in into the system and just keep track of annual wages. And then they apply the formulas to that the term trust fund a self-insured insurance program a n e corporation that has a pension plan like this or any insurance company run like the social security system as would be put out of business. It would be illegal when the currently benefits are being paid out.True people who are currently working. So retirees are getting their checks from people who are working today. The annual Surplus is the extra amount paid in by people who are currently working have been running from about fifty to a hundred billion a year that's being used to decrease the federal budget deficit that money is being spent and so the deficit actually is worse than it appears to be in return for that extra money. That's being spent what the Social Security quote trust fund consists of a pile of IO use from the government and these are special non-marketable I owe you's now when when when the Boomers start retiring long about the year 2015, we're talking twenty years here and people who are retired or going to take their Social Security checks go to the bank and want money and what will be sitting there is a pile of Ayo. Use these are not stocks and bonds that can be sold or cashed out.At that point, what is the federal government going to do and that's what the trust fund is the government will either have to print money which would cause hyperinflation or they'll have to increase benefits on current workers at the time 2:35 to 40% rates or they'll have to slash benefits. They're there are not a lot of options here. So we we know the train is coming down the tracks we can see it we've got time now to do something about this yet. No one has the political will to do it back to the phone lines. Our Guest is Erica whitlinger co-founder of the Minnesota chapter of the Concord Coalition. Our next caller is Bob for Minneapolis. Bob your Minnesota Public Radio. Hello. I'm very confused by this whole issue of Social Security. I see that there are there two different.Types of opinions that I will I will hear about there's one that's usually put out by the the organization such as the AARP and and buying a older persons and organizations that says that Social Security is running great, you know, we don't need to do anything to change it and then I hear what I just heard right now, which is kind of a real scary point of view, you know that says that maybe Social Security is not going to be there for people in the future of the Baby Boomers. I'm 40 years old. So I'm I'm really concerned about this. I don't know if it's misinformation or or what seems to be going on right now. I'm in the same the same kind of you know that I guess I'm just saying that this it just seems like there is there needs to be some real information out there that we can look at that. Is that some you know something that will that's true and I that we can look at your right Bob.System is currently set up there is plenty of money for retirees. And as I said, there's some extra that the government is spending on other things. The problem is is that the way the benefit formulas and so on are set up now is that when people doing the Baby Boomers start retiring there won't be enough money. Then the people who are working then will not be able to pay enough taxes to support the retirees at that point in time. So that's the problem is it's not what's happening right now today things are fine today. It's what's going to start to happen in about 10 or 15 years. Lots of folks in the line Erica. What longer we go next to Paul from Saint Paul High fall interesting fact that you federal tax dollars paid by individuals west of the Mississippi are about equal to the percentage of servicing servicing not reducing servicing the interest on the federal deficit or federal debt.Lee as evidence Minneapolis School Board lawsuit just announced this morning acrimonious in fighting over what is out there amongst those people that want to get their hand in the till and right now we're paying about Nestle 33% of our GDP gross domestic product in two States Federal and local tax in a sweat. It might be up around 35 or 36 percent occurred of Economics showed us shows us that capitalist systems begin to shut down around 48% tax level individuals. Quit working overtime antreprenor has quit investing in businesses factories. Quit buying a new equipment know if you look at the demographic Trends population growth amongst those people that pay the least taxes and have the greatest Demand on Services combine that with the growth of baby boomers. I think two things are inevitable. I think within the next 10 years will approach to 46 48% tax level as percentage of GDP begin to see really incredible.Fighting a pessimistic as I am. I think we're going to end up with a country that looks like roller blade. Was it wrote Blade Runner? That was the movie. I saw that was so pessimistic. Hopefully that isn't the case. I don't see much a way of avoiding that Eric. I wish you luck and I hope that you're a member of the Concord Coalition because people out you talking like you talking about these issues and identifying yourself as a member there such a feeling of hopelessness out there. I believe we still do have time because we can see these trains coming down the track what I think will happen. If we don't start fixing these problems very very soon. We're going to end up with an economy like in England where we have many many people.On welfare, High tax rates little incentive to work and get ahead. So what we're going to end up with is in a weak currency and just a fading National economy compared to our Global competitors. And so I think and then you're in it's much more difficult to try to dig your way out of that. We saw with what they've been trying to do in England, but we have examples of this right now of herb for NPR listeners who listen to the Canadian broadcasting shows like as it happens and CBC Sunday morning, they're taught they're having these problems in Canada right now today and they're there a few years ahead of us in terms of bad numbers, but we're going in that same direction similar things are happening in countries, like Belgium and Italy were seeing other countries in Western Europe like Germany and Sweden starting to cut back on social welfare programs. So this is not a unique problem to us. It's just a very very immediate problem.Back of the telephones now and Ron from Saint Paul High Rodger, Minnesota Public Radio station that which Senator Kerry made the comment that the social security system was really viewed as as a kind of an insurance system one of the biggest or the biggest in the world and some of the proposals to solve these long-term issues have a son of the round the idea of putting a means test on converting the insurance concept into a making the other social security systems turning that from an insurance program into a welfare system.I'd like every comment on that and a couple of other questions you mentioned the idea of the political suicide. I don't know exactly how Social Security is running right now, but I think that one of the problem driver seat is that politicians or Congressmen have too much input into much control over what happens with Social Security funding and the taxes so required to support it. I just wonder if anybody is ever come up with the idea or thought of the idea of putting Social Security on the same footing and say the Federal Reserve board another words created Social Security Board that has the same autonomy Authority control and call her over the social security system. And that would mean taking the Social Security taxes that are now included in with the federal budget Caicos out of the federal budget and put it under a separate entity controlled by the Social Security Board.In terms of putting under separate control that has been proposed part of the problem is is you need that the current retirees are being paid by current workers. So the money that current workers are paying cannot be set aside in any kind of an investment plan for them because it's going to be too current retirees. So that's the big reality of the system. Some people are talking about privatizing part of Social Security taking a small part of the payroll tax and making people put that into an IRA account type account rather than it going off to Washington in terms of means-testing Social Security the idea there is that there are significant benefits that go to higher-income people and it's been my experience that most higher-income Social Security recipients would be more than happy to give up some or all of their benefits if they knew that it would go to fix the system and to reduce the deficit in terms of switching Social Security from an insurance program to welfare program. It's not an insurance program as a transfer payment program.It's coming from current workers and going to current retirees. It is not being set aside and invested the way it would be in a true Insurance scheme. So the system isn't working the way a lot of people think it is now. I I want to point out. That one FDR started Social Security the average life expectancy in the United States with 63. So it was a fairly safe bet to get benefits. And now of course people are living into their late 70s and early 80s and that's part of the problem. Lots of questions about social security Medicaid. What what what do you think was going to happen to those programs and Welfare? What we consider to be welfare spending is 5% of total government spending and in even by broad definitions, it's only about 10% of entitlement spending inIt's also include government pension plans for for civil service and military retirees that those plans haven't been funded either. So that's going from from current workers also add price supports agriculture price supports unemployment compensation and Medicaid which is about 6% of government spending, but all the things that we think of SSI food stamps the Earned Income Tax Credit afdc is only about 10% of total entitlement spending. He's like all these government programs have winners and losers and they winners are all for getting the money in the fluids are all against giving them the money and I wanted a loser. So I'm paying into Social Security and I'd like to know how to jump off the ship and get in a Lifeboat and get out of the social security system. There's no way you can do that. Sorry.Play Store just don't do it. Well, yeah, you can't you can't get out of it and the best advice I can give people younger people just to save for your own retirement and don't assume that those benefits will be there when you retire. All right back to the phones David from Willmar High David Wright, Minnesota Public Radio in for corporations. There are dozens of rules in the US tax code that were all documented in the 1992 book America. What went wrong that's the middle class never gets to take advantage of a good example of that is a 1976 law passed by Congress that allows profitable drug companies in the United States. They close plants. They fired thousands of employees or making $13 an hour and they sent those jobs to Puerto Rico. So that's those companies could avoid paying us income tax.Robert rice has talked about that. Yes, he has raised those issues how a lot of that again comes from special interest lobbying and Industry lobbying where they will go and they will get specific Provisions put in for their particular interest. I'm in in legislation. So that's on a real good example of that kind of Problem by corporations. By the way. I only pay about 11% of the government's income comes from corporations. 77% of one Sam takes in and turns a real cash money comes from us that was met with some skepticism. So is that why it's it's just not that that mean you concerned about it, of course, but in the in the whole scheme is just not that big of a deal corporate income taxes have been a decreasing part of government revenues and individuals are paying more and more. I'm not sure how people are aware of that when I start feeling about their taxes. Let's go back to the phone the gym from Rochester how your Minnesota Public RadioJim Erica, thank you, Erica. I'd like to ask about the federal pensions. It is my understanding that are federal pensions for Congressman all federal employees, including the armed services are very generous and also go up with cost of living and inflation wear as nearly all pensions in this country do not have those perks. I wonder why this area has not been attacked as as being the Too much money being spent in this way. They are starting to talk about it and polishing talks about again not hurting current retirees, but making the system more Equitable in the future in terms of comparing a corporate type pension plans to federal pension plans. But again, this is a relatively small part of government spending. So so we can fix that. We will still have an enormous budget deficit. All right, let's go back to the telephone the day from Scott County is next tide, Adrian, Minnesota Public Radio. I'm self-employed. Therefore particularly hard-hit by Social Security Social Security and securities rather than dumping down the Rat Hole the general fund. I would prefer to see that happen at that that it would be invested in and something real rather than more national debt, but of course, I'm a money manager. So I'm somewhat buy us there. But I agree that there are other number of different incremental things like that that could be done to solidify the system and as it is now it's simply being added to the pile of national debt in the imputed interest on that money is piling up as well. Hands, go back to phone stay for the atlas. Hyphae your Minnesota Public Radio the managing their entitlement programs. I've always been under the impression that we pay less in taxes and provide less entitlements. In other countries, particularly European countries. And is that a correct assumption? If not, could you clarify that for me? Okay, we do pay less in taxes than other industrialized Western Nations. The difference. However is in healthcare spending because the other countries have Nash some form of nationalized health-care. We do not if you take federal and state and federal spending is about 20 to 24% of the gross national product about a quarter of our economies federal government. If you add in state and local governments, you get up to 1/3, if you toss Healthcare on top of that that's almost half of the United States economy. Get us up there of her example was Germany so are our tax rates would be very comfortable in there and the countries that have more extensive social welfare benefits, like the Scandinavian countries in Germany are trying to figure out ways now to dismantle and decrease those benefits because they're having similar demographic problems to what we've got. The Japanese have the same problem of a rapidly aging population and not enough of children being born to support retirees back to the dick from Elk River eye dick your Minnesota Public Radio discuss this with do not realize that are public employees governmental and even people and Social Security are not on Social Security and I'm wondering what kind of effect this has or when this gets out more what kind of effect that may have on public reaction right. Now those kinds of plans are included in an entitlement spending. So government government pension Zara. About 5% of current government spending their included in that amount for entitlements but is a previous caller pointed out that the pension systems tend to be more generous than they are for Private Industry workers. We talked about some of the politics of this earlier in ICU in Cumming Speaker of the House Newt Gingrich says, he won't support any reductions and Social Security. I think the president is also supposed to that's the third rail of politics touch it and you immediately are electrocuted while they're obviously there are other things. What are the reasons Clinton wanted reform Health Care is because that's such a growing proportion of federal spending Healthcare now is about 15 16% of federal spending and it's been growing at double-digit rates until the last year or two and health care expenses are still growing at 78% a year in terms of inflation. So that that's an area that would help but would not solve the deficit entitlement problem. And of course the Republicans at have been Talking quite a bit about you know, pulling the plug on entire departments in in cabinet-level posts in Washington. That'll be interesting to see what happens. When all those people start lobbying to keep their jobs. I like to give out a number for those of you who are entitlement junkies the CVO the Congressional budget office has a booklet out called reducing entitlement spending. Now, this is just about entitlements. It does not address the broader deficit issue, but you can call the Congressional budget office in order that it's five and a half dollars. You can give him a charge card number and their number in Washington is 202-512-1800. If you want a broader discussion of the the whole budget system and how we could eliminate the budget deficit the Concord Coalition has a zero deficit plan that would eliminate the budget deficit by the year 2000 IT addresses all these different issues of raising revenues and in fixing entitlements and so on. The Nationals off the national office number is 202-467-6222 in the Twin Cities. And of course A Familiar voice on Minnesota public radio's sound money program back to the telephones now Woodrow from Saint Paul, you're on the air ask why the io use that are being piled up in the Social Security trust fund. Now in anticipation of paying out to the Baby Boomers in around 2010 would be considered at greater risk than any of the other obligations of the government all the other bonds with your part of the national debt, which are being held by either the Federal Reserve are the banks are individuals or Japan or Germany and Y if the io use on Social Security are defaulted or can't be met why the hold the whole ship would be sunk. Whereas every month or selling billions of dollars are government bed on Wall Street and people keep buying them at Victorian 5 10 20 years Social Security Rio used to be at greater risk than say treasury Securities, but that that part can be tinkered with I mean that the imputed benefits sitting there can be changed before the people who are currently paying in actually retire. So I don't consider that money to be at greater risk than treasury Securities the point I'm trying to make is that when Social Security retirees want to cash their checks and what is there is a pile of IOU is that isn't going to be like owning AT&T bonds or AT&T stock where you can turn around and sell it. It's a special I owe you from the government. The government has to come up with cash and the thought of the government issuing a 30-year bond in order to pay me my cash social security benefit 15 years from now is absolutely terrifying. Back to the phones now bill from Gilbert to Billy earlier arrival. Can you be more specific? What is the total of government dial using Social Security trust fund of the current national debt is about 4.6 trillion dollars somewhere between a quarter and a third of that is money that has been borrowed from the social security system and from the federal and Military pension plans. Awesome proposals out there not not as big but we should we should mention because they really hit home to a lot of people limiting home mortgage interest deductions is our entitlement. Those are those are called that tax expenditures meaning that by giving people out of deductions for home mortgage interest by subsidizing employer-paid Health Care by letting companies deduct it at what you're doing is that the entitlements for people who are working and not on welfare not retired and so on and when you include those is entitlements 3/4 of the people in the country are getting entitlement benefits, but when you just take regular entitlements as in money from the government and programs like, uh, student loans and Salon in Medicaid, you're talking a half the population in the United States is getting some form of entitlement from the government. What is there has been some question about the word entitlement and I think it is I mean is it the entitlement is at our our folks entitled to this? Yes entitlements by definition. The law says if you have these characteristics you are entitled to get benefits if you're over 65, if you're unemployed, if you're a farmer meeting certain criteria, you are entitled and you get those automatically and that's part of the problem is these programs are set up and they run on autopilot Congress doesn't vote on these programs each year. So if if many more people qualify, for example for unemployment the cost of those programs goes up, so they're all on autopilot and they're just off and running Frank from northome Frank, Iero, Minnesota Public Radio today. I was just wondering where are these new thinkers coming from that are supposed to be heading for government that as far as our school systems are concerned. We should be raising new thinkers to do other things other than just tax my idea is is that I have Okay taxes because who are we going to bring about all of this money to pay for all the government agencies and stuff. So I realize we have to pay tax right now. However, there has got to be also other ways to raise money. No. From what I seen basic religious Legend just puts more taxes or finds different ways to bring money in other than making money by the government security is right now operating at a surplus. So they're spinning at Surplus on something else rather than reinvesting it right or later on when you run out of money. What kind of thinking is that? I don't understand it. There are all kinds of things that can be done it this is not simply a matter of slashing benefits and increasing taxes their issues like taxing some benefits changing the decrease in the number of recipients example means test changing eligibility increasing the age for Social Security. Most people don't realize that the social security age for most people who are working now is going to be closer to 67th and 65. It's already scheduled to start going up. You can also cap total entitlement payments for people who are getting paid for multiple programs. Fiddle with the cost of living increases especially for higher-income people. You can try to cap spending on particular programs. There are a lot of different options. The problem is the government isn't doing anything with any of them that no one is trying to do anything about this. And as I said earlier, the Concord Coalition has come up with a comprehensive plan to attack the entire deficit problem and if people again call national office for that, and for those of you who are up to speed on these issues in her interested, I'd like you to join the local chapter of the Concord Coalition of the number in the Twin Cities is 38108 110 cuz we would welcome you as members and especially is outspoken members. How do you respond to the problem with a budget deficit is so enormous that everyone except the poor is going to have to chip in if we're going to fix this. That's why we talk about things like eliminating homework. Interest deductions on houses that cost more than say $200,000 a year the coalition's plan came up with several dollars in spending cuts for every dollar a tax increases and a big chunk of the tax increases came from gasoline taxes and send taxes and I have found at least in Minnesota that most people would be willing to pay more in gas taxes and send taxes so that the coalition's plan is based on member surveys. This is not a think tank of folks sitting in Washington thinking great thoughts, you know, where a volunteer group in our members filled out surveys and sent them to Washington. So that's what the plan is based on his what people said people who are knowledgeable about this this issue double-dippers healthcare insurance reform and the cap on annual tax-deferred Ira contributions taking the last one first. If you're able to pay in to a naira consistently on a year-in and year-out basis, you can put away quite a bit of money over say at one of your period of time all tax-deferred but it for certain reasons you weren't able to do so, let's say in your forties but in your 50s say you were able to do so, but you're limited by a cap. So it seems like it's a very unfair treatment of people who fall into that latter category healthcare insurance reform from the question of entitlement because of the fact that as you pointed out earlier than 15% of the GDP is taken up in this country for healthcare and it doesn't cover everyone as opposed to let's say I think it's about 9% for Canada. Well that additional 6% on a 6 trillion dollar economia monster 360 billion dollars find a way to remove That that load off of the economy and it will have some very direct effects on some of these other issues of the Social Security at self and a double Dippers. I haven't heard anybody talk about them recently. I'd like you to comment on the effect of that on the problem of social security issue double-dippers, which is an example military and people who retire after 20 years of service then go to work in Private Industry and they get a full military pension and they get a pension from a corporation and I get Social Security that is an issue that a lot of people again things that military pensions in the future should be changed to to be more competitive with those of Corporations. And I think that's a very worthwhile area to look at that is one of the things that the Coalition is advocating changing in this part of the zero deficit plan. So there are a lot of things here, but but many of these things that's interesting when you when you was going to talk shows. As you People will call up and they'll rant and Rave about egg price supports. That's 1% of federal spending for an age limit ate all of it. That's 1% of federal spending. A lot of these little things that people say well, let's get rid of the space station and let's get rid of this. Let's get rid of that add up to billions or maybe tens of billions, but we still got a budget deficit of about 170 billion a year. So you've got to do a lot of cutting of a lot of little programs to it should get up to that. There's a there's a new program on the Internet by the way where people can actually balance so they can balance the deficit. It's it's not the it's not a complete program, but we have the information on how to get into the net to do that at the Concord Coalition office again. Yes. The number is 381-0811. And the Coalition also has an exit what we call an exercise and her choices where we do several of these in Minnesota a year. We get people together with all of the different options for increasing taxes and cutting spending in there real options. Real numbers. This is not a game and we get people in small groups. We mix them up by agent in background and political leanings and then the group's decide how they would balance the federal budget deficit and everyone who goes through that says everybody should do it to em Penny. It said everyone in Minnesota should do that. Sounds like a lot of fun. I think it's a it's a fasting is budget Shadows is what it's called in. Yeah, you can do it on the Internet or you can do it live with your fellow citizens with the Minnesota Concord Coalition that bipartisan Commission on entitlement tax reform did indeed send a letter to President Clinton today and the Congressional leadership and it says they could not agree on the cusp necessary to prevent the budget deficit from growing in do you vote was 24 to 6 to send that letter so it sounds No official. Well, let's get back to the telephones now and find out what people are thinking about Dupaco from Minneapolis. How you run the air? Country Peru in South America, we're not so long ago. We had the president's or do what they come out to go pee which was basically kind of doing away with The Rocker C for a short time and I'm wondering when I hear some of the talk to be heard today if America for how much longer it can afford its democracy when you talk about things like the third rail politics in the letter that you just mentioned that went to Clinton today. We said, you know, we can come to an agreement if that's motivated by the fact what we can't get reelected if we say the things we specifically agree on it. It just strikes me that maybe there needs to be a change of political system in some democracies going to have to be traded in to make a physical progress in particular. I can remember from Argentina. He lives in a different state wrote me a letter talking about what he'd seen the Argentinian economy go through because they had done what we're doing now years ago and that their economy is still Trying to recover from that. They used to be one of the richest countries in the world. And I I think this is a threat to to democracy. I think it's a threat to the American dream. It's saying that the people won't be able to have better lives for their children than they have because the government is spending so much money in this is going to chew up the economy in the future and I think we need to get more democratic right now and people need to get more involved in this issue and let their elected representatives know that they want this fixed and they want it fixed now, that's the only thing that's going to change it is if enough of us tell our congressmen and Senators that we expect them to go to Washington and we respect them to do something and I think it's very important to what I hear from every Concord Coalition member is I'll be happy to give up some of my social security benefits or I'll be happy to pay more taxes or whatever if it goes to reduce the deficit and I think that many people in this country are ready to give something up as long as they know that everyone else who is in poor is making a sack When I think that's the key and somehow we need to get that critical mass of political will that will change it if if this doesn't change I'm fearful that we could end up electing a demagogue for president in a few years because people young the swelling of the Left Alive swing to the right if this doesn't get fixed if the if the deficit goes up that we could have a terrible political crisis in this country Minneapolis your next I John I was wondering if your guest has a figure on how much is actually spent on welfare in this country both state and federal. It seems like in the you know, since the Republicans win that there's been all this talk of welfare reform in the figures. I've seen seemed like that. It's actually a fairly modest amount goes to welfare, but I haven't been able to find Anything like a total figure that would include things like Medicaid and job training study has all of those numbers in it right now for SSI food stamps earned income tax credit and afdc. The federal government is spending about 71 billion dollars a year. That's the equivalent of of about half of the current budget deficit which is of the devil sitting down by the way, that's about 5% of federal spending it. If you take all kind of very very broad definition of federal spending in throwing Medicaid, you're talking about prep 13% of federal spending going to the poor half of that is Medicaid and the majority of Medicaid goes to the elderly and the disabled not poor people. I also looked at samarra should say Ellen Dixon one of our most active Concord Coalition members as she looked at State spending as well. And and when we take the very broadest definition of all federal spending, Children including education vs. Federal spending on the elderly. It's an 11 to 1 ratio in favor of the elderly if we add in state and local spending including education. So this is how much federal state and local spending on children versus the elderly. It's a 3 to 1 ratio in favor of the elderly were spending three times as much money on older people as we are on children and there are twice as many children in the country is there are older people who founder of the Minnesota chapter of the Concord Coalition armed with facts and figures today and lots of people calling and letting out these numbers just as accurate. All right, let's go to mark from Rosemount High Mark your Minnesota Public Radio your knowledge and I really feel that the fruit for one of the first times listening to public radio that there's there's and I love the show. I think it's fantastic. Yeah that you're you're a straight shooter and you understand the real problems of American and I'm wondering if some day that you'll consider going into the political field because you know, I'm a business owner myself, and I'm so frustrated with the politicians in the end. I I contribute a lot of it to they don't have the experience or the knowledge on how to take care of our other problem. So, I mean they said they say we can we we we can fix these problems, but they really can't they they don't have the the background and I was wondering Erica few has any comment on dit. Should there be some type of criteria before a politician can even run and I didn't mean to laugh why not? You know, I think those are the criteria for running that should be the responsibility of the voters. I think we just need to pay more attention to it to who's running for what in. As far as my political Ambitions, I will be happy to give you the names and numbers of several of my close friends who would laugh uproariously at the thought of me going off to Washington. I am temperamentally totally unsuited for that kind of work. I'm an idea person. I'm also an entrepreneur. I have my own money management firm. And as I like to say we can get everybody in the company in my office and we can sitting in an hour make a really important decision and then we go do it and that's the kind of person I am so I much prefer to stay on the policy side of the Concord Coalition and met with but we are members meet regularly with our congressman and Senators. We met with the number of candidates before the election MPR broadcast. One of the only two pre primary candidate Senate candidate debates before the Senate primary this fall we had bierstad Foley grams in wynia. That's the kind of thing that we've been doing. So we have been working very closely with our elected officials and with Four candidates and I but I I much prefer to stay here for the last two sometime down the road listening to program pretty late. But one thing I've noticed lately is every time they want to talk about the disc discuss the budgets whether it's you or anyone else first thing you want to talk about is entitlements and they only one include Social Security Social Security surrounding a surplus. So it's definitely not the current of the deficit in the federal budget. Number one second lie, since it's funded separately. It should be removed from the budget. Once you remove Social Security in the budget, then you can look at what the real deficit is and what the real problems are. And you know, I stand here all this cutting entitlements unlocking Social Security together, but nobody's talking about other items. Like what's being sponsored lately increasing the military budget increase in the federal deficit of / 3 trillion dollars, and now we got to deal with it. So I'll let you and the rest of that. I just want to point out that under Reagan entitlement spending also soared deficit and entitlement spending went up under Reagan other government spending stayed flat. So it was not a matter of ab defense spending on defense spending went up entitlement spending went up. Everything else was flat. The Concord Coalition are members overwhelmingly believe the defense should be cut. I personally think the reason Republicans are talking about increasing defense spending is because they're pandering to voters in California and Texas where there are a lot of defense-related Industries part of the reason social. Security keeps coming up is because social and secure security and Medicare is a third of the budget. And again, we had an interest on the national debt defense spending it. There's not a lot left to cut and that's part of the problem in an addition as we talked about earlier the social security system is Actuarial the unsound it ain't going to work for the baby boomer. So something needs to be done or just a few minutes left. So a couple more calls here Jeff from Bloomington. I Jeff you're on the air. Yes. I wanted to be a voice for some of the people that might not actually go along with somebody's emotions being made that for one. Austerity is the new mantra that does so many governments are chanting that maybe it's the social values of the governmental spending that should be looked at and she's mentioned that the Concord Coalition and in five or six short years would be able to to hack that deficit right off if they could be trimming the social consequences of that. I'm wondering if they attach any sort of social value to some of the government spending. It is worthwhile college education spending Healthcare spending so for it, and if the if the defense department can't do what It supposed to be doing for half of what it's got right now. There's a huge bureaucracy. I'm surprised to hear that you think that the defense department can't cut its budget. I think it could probably weed out of a hundred million and my point is basically if we go to austerity as the first principle without looking at the social value of some government spending in the social consequences of huge decreases in spending over a short. Of time. We might have sort of social problems. You mentioned earlier with the coup d'etat in Argentina being rightward shift could be a consequence of that type of enormous deficit-cutting right away. The the defense spending should be cut I am sorry if I gave you the wrong impression defense spending can and should be cut further. That's certainly what the Coalition believe what we also fine with our members is people do not want to cut programs that help poor people and help people get ahead. They don't want to do that the vast majority of Coalition members are talking about The great phrases cutting entitlements for people like me. I'm willing to give something else up if everyone else is so people do not want to hurt the poor they do not want to hurt the economy. The idea of being is at the less money that gets sucked into the government rathole. The more that is available for savings and investment and productivity so we can have a balance between social programs at the kind of concerns. Your raising are the ones that that I would be worried about welfare reform if I were you about Draconian welfare reform because that could have a real impact on the children in this country or whatever one real quick comment to Paul from Bloomington. How you run the air Paul my 401k plan for the last 4 years at 10% My employer does not match my contribution and the benefit that this being claimed as that. I may be at a lower tax bracket when I reach retirement age. And what what I'm hearing today is that that may not be true that I may be at a much higher tax bracket when I reach a tree Armitage and so it is is a 401k. Are you want to pay lots of taxes? Because you're so well-off. In fact, you want to pay enough taxes to support a small nation. So don't bet on social security or other kind of money being sitting out there for you. When you retire at you're getting tremendous tax benefits now and that money is yours. And if it's the fort under your control so continue to put as much money as you can into that plan. All right. Thanks so much for doing this. You're welcome. I appreciate it. Then. Thanks to all of you who called today. Our guest has been Erica whitlinger co-founder of the Minnesota chapter of the Concord Coalition. It's a nonpartisan group devoted to dealing with the federal deficit. Erica is also president of Whitley or Capital Management in the Twin Cities. And of course is familiar to many Minnesota Public Radio listeners as a regular on Minnesota public radio's sound money program.