Did Somebody Say 'Generational War'? By: MATTHEW MILLER


February 17, 1991

FOR ALL THE twentysomethings now too glued to the tube's Persian Gulf coverage to notice what President Bush left out of his budget proposal, here's a quick tally of the crushing domestic liabilities he and Congress are still building up to bequeath to us in a few years.

Unreformed, these "entitlements" our elders are expecting us to honor amount to an astounding $10 trillion in today's dollars -- with only a few pennies currently set aside. Where do they think all that money will come from? Look in the mirror and stay tuned:

* Social Security: As it turns out, the 1983 "fix" of the system was just a Band-Aid. Today's "surpluses" you hear about -- which in any event are being spent to cover the rest of the government -- cannot begin to compete with tomorrow's inexorable demographics. In the 1950s, there were nearly 10 workers paying payroll taxes for every retiree drawing a check; today there are three, and the number is still dropping.

Our politicians know what this math means, but you won't hear a peep from them until the next crisis looms. The result? Only massive new tax increases on today's young folks will prevent the system from going bankrupt when the postwar baby boom hits its rocking chairs early in the next century.

Can this be fair? Contrary to popular myth, today's retirees already receive back from the system between two to five times what they put in. This windfall -- which remains only partially taxed and fully indexed against inflation -- is funded by regressive and ever-increasing payroll taxes on workers who have seen their own real wages stagnate for two decades, and who have no assurance the system will be there for them.

How will today's twentysomethings react when our politically powerful parents try to tax the pants off us in a few years to keep the checks rolling? Did somebody say "generational war"?

* Medicare: U.S. health care expenditures are by far the highest in the world -- and they have exploded from 5 percent to 12 percent of the gross national product in the last 25 years. Yet more than 30 million Americans have no health insurance at all. This means a system of truly Dickensian ironies: Elderly millionaires get free cataract treatments while poor pregnant women cannot get a checkup.

With expensive technology expected to keep costs spiraling, and a full third of Medicare dollars already going to the last year of life, when is someone going to stand up and say -- as other countries do -- that we simply cannot make access to care more widespread and simultaneously let everyone get every treatment they would like? If we plan to spend money on anything besides health care in the America we inherit, a word we twentysomethings had better start rehearsing now is "ration."

* Federal pensions: The $60 billion the federal government spent last year on retirement programs for its employees was more than it spent on higher education, consumer safety, AIDS research and treatment, Aid to Families with Dependent Children, food stamps and low-income housing combined.

What's more, these pensions are by any standard the most generous in the nation. Consider: Two out of five civil servants retire before age 55, and at a percentage of pre-retirement pay that dwarfs programs in the private sector. Disability criteria are so lax that more than one-quarter of the pensioners collect extra for being "disabled."

Sound cushy? The median age for military retirement is only 41. With 20 to 30 years on the job, the serviceman, who makes no contributions to his pension, retires on 50 percent to 75 percent pay. He is also free to collect Social Security and pursue a second career to achieve the armed forces' famed "triple dip" pension.

It is only fair to question whether the nation should extend such largess -- especially when it is the careerists (most of whom never see battle) who enjoy these boons, while the short-service soldiers, such as today's courageous gulf fighters, get nothing.

If the government had to act like a business and put aside money each year as a reserve against these and other "unfunded liabilities," the budget deficit -- which will already come in at a record-breaking $300 billion in fiscal 1992 -- would increase by at least another $150 billion.

Worried yet? No one can be sure how our society will be wrenched when these postponed bills are presented to today's twentysomethings. But our leaders, and our parents -- who stand silent as citizens while the debts continue to mount -- should rest certain of one thing.

We've read your lips: Let the kids pay tomorrow.

Matthew Miller is a New York management consultant who writes on politics and economics. He wrote this commentary for the Stamford (Conn.) Advocate.

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