Jan 1, 1988
This article, which appeared in the GAO Journal, No. 4, Winter 1988, discusses ways to reform entitlement programs. Social security benefits constituted more than 42 percent of federal entitlements outlays in fiscal year 1986, while federal health care programs were about 16 percent and retirement systems were 9 percent. Entitlements growth after 1980 was entirely due to expansion of poverty programs. Reform should be based on: (1) prudent assumptions about the nation's economic and demographic future; (2) reducing benefit costs while raising the collective level of savings; (3) equitable reforms between generations; (4) fairness to the poor; (5) gradual changes to allow for behavioral changes in household spending habits; (6) institutional continuity, such as links between the citizen and the state; and (7) development of continued contributions to society, rather than dependency. However, the obstacles to entitlements reform are formidable, since special-interest groups that try to ensure benefits programs' continual expansion have considerable influence with policymakers.