The federal government spent $2.5 trillion in 2005: about 20 percent of gross domestic product (GDP) and 33 percent more than it spent in 2001. However, the bigger concern is that Social Security, Medicare, and Medicaid spending will explode when the baby boomers retire, doubling the total federal budget to nearly 50 percent of GDP by 2050.

Congress has no plan to pay for these promises, and the budget rules actually hide the total cost from Congress and the voters. In 2005, unfunded Social Security and Medicare obligations totaled $36 trillion. When public debt and other traditional federal liabilities are included, the total U.S. federal debt is over $46 trillion--the equivalent of a $375,000 home mortgage for every full-time worker in America, but without the house. According to the U.S. Comptroller General, this figure was only $165,000 in 2000. Yet Congress, rather than confront this growth, has chosen to compound it with the Medicare drug benefit.

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Read Federal Budget Should Include Long-Term Obligations from Entitlement Programs by Alison Acosta Fraser

The President's Proposed Line-Item Veto Could Help Control Spending

President George W. Bush has asked Congress to enact the “Legislative Line-Item Veto Act of 2006.” This proposal, sponsored in the Senate by Majority Leader Bill Frist (R-TN) and in the House by Representative Paul Ryan (R-WI), bypasses the constitutional concerns that led the Supreme Court to rule the Line Item Veto Act of 1996 unconstitutional just one year after President Bill Clinton used it to strike $600 million in spending. While this new line-item veto could help to control spending, it alone will not solve the problem of runaway spending. While working out the details of this legislation with Congress, the President should also use the tools already at his disposal, such as the veto and his executive power.

The Stop Over-Spending Act: A Real Opportunity to Limit Spending

The Stop Over-Spending (S.O.S.) Act, authored by Senate Budget Committee Chairman Judd Gregg (R-NH) and cosponsored by over a dozen senators, provides a strong blueprint for building a budget process that reflects America’s budget priorities. The S.O.S. Act would create discretionary caps and temper exploding entitlement costs. It would create commissions to wrestle with unsustainable entitlement growth and government waste. The S.O.S. Act includes President Bush’s line-item veto proposal, a switch to biennial budgeting, and several enforcement and rules improvements that would help Congress get a better handle on federal spending. This package of budget process reforms would help lawmakers pare back spending trends that would otherwise, within a decade, require tax increases of nearly $7,000 per household just to balance the budget.