If the American public saw our financial statements in the same way that public companies report their pension liabilities, it would clearly see the magnitude of danger represented by the future borrowings that these liabilities to an aging population imply—borrowing on a scale that would not only bankrupt the programs themselves but the entire federal government. And to a worrying extent, we are locked into continued escalation by the fact that social insurance programs, as well as other mandatory programs, carry payments that are in accordance with automatic formulas written into law and are not subject to an annual spending limit. Today, less than 40 percent of our budget is actually decided by Congress and the president, down from 62 percent 40 years ago.
Add in the fact that the Federal Housing Authority confronts a $16.3 billion net deficit after its latest audit that may force a taxpayer bailout for the first time in its 78-year history. And just four years from now, in 2016, the Disability Insurance trust fund will be fully depleted.