Fiscal reform has become a hot topic in Washington as spending hits all-time highs and Congress and the President continue to push several new high-ticket items closer to law.* Lawmakers and concerned citizens alike are shifting focus to the looming fiscal crisis that will be caused by from entitlement spending on the Medicare, Medicaid, and Social Security programs.* But for Social Security, that red ink isnt so far off in the futurein fact, its scheduled to arrive in 2010.
<ahref="http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103345_pf.html">In the Washington Post, business columnist Allan Sloan highlights a report from the Congressional Budge Office (CBO) which confirms that in 2010, Social Security outlays will exceed revenue for the first time in 25 years.* The CBO report shows that Social Security will earn $120 billion in interest on its trust fund, which would seem to cover its $92 billion surplus.* Not so.* As Sloan explains, the interest does not constitute funds with which to pay benefits.* It is nothing more than IOUs from the Treasury.
The CBO report shows decreased deficits for 2011 and 2012, with Social Security breaking even thereafter.* But as <ahref="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm">The Heritage Foundation has warned, by 2016 Social Security will begin running permanent deficits.<spanid="more-25410"></span>
This latest twist on Social Securitys financial shortcomings is attributable to the recent economic downturn.* Revenues dwindled as Americans lost their jobs, reducing tax collections.* This effect is compounded by the greater number of Americans forced into early retirement and newly dependent on the Social Security program.
Social Security benefits will not be reduced in response to the deficit.* Rather, taxpayers will make up the difference, via aid from the Treasury, in order to keep benefits checks from bouncing.* The early arrival of the need for a Social Security bailout should serve as a severe reminder to the Obama Administration that entitlement reform is needed now to ensure a sustainable economic future for the country.* And yet, the Presidents recently published 2011 Budget does nothing to address this growing problem.* <ahref="http://www.nytimes.com/interactive/2010/02/01/us/budget.html?hp">Spending on Social Security, Medicare, and Medicaid continue to eat up a major portion of federal funds with no serious reform efforts in sight.
<ahref="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm">According to Heritage expert David C. John, there are ways in which Congress and the President could provide short-term solutions to fix Social Security.* These include reducing benefits, increasing retirement savings, and raising taxes.* The first two solutions are the most promising, but would not immediately produce reversals in spending as such changes would have to be phased in, since it would be infeasible to change benefit structure for current retirees or those close to retirement.* As for the last idea, politicians should steer clear of raising taxes to cover short-term Social Security deficits, as this merely delays more substantial change and is an insufficient long-term solution.
<ahref="http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103345_pf.html">As Sloan writes, Until this year, Social Security was a problem for the future.* Now its a problem for the present.* Hopefully the President gets the message and pursues the necessary measures to properly address this event.




</p>In an unusually <ahref="http://www.sigtarp.gov/reports/congress/2010/January2010_Quarterly_Report_to_Congress.pdf">hars h report released yesterday, the government’s Special Inspector General for TARP blasted the bailout program, charging that it has not only failed to meet its goals, but that — absent change — it may have made things worse.
</p>While the federal government already spends as least $25 billion on the existing 69 preschool and child care programs, the Obama administration is calling for #70proposing $9.3 billion for a new Early Learning Challenge Grant. As <ahref="http://www.heritage.org/Research/Education/wm2643.cfm">we wrote last year, the Early Learning Challenge Grant fund would push states to spend more on preschool programs, when evidence is mounting that preschool programs arent delivering the benefits their proponents promise.<spanid="more-25263"></span>
</p>President Obama released his fiscal year 2011 budget this morning; his budget provides $28.4 billion for the Department of Energy (DOE) and $10 billion for Environmental Protection Agency (EPA). Both <ahref="http://www.whitehouse.gov/omb/factsheet_department_energy/">sections in the budget reflect the presidents message in the State of the Union address delivered last week: a government attempt to facilitate Americas transition to a clean energy economy.
</p>In the February 1, 2010 edition of StateNet Capitol Journal, Lou Cannon <ahref="http://www.noozhawk.com/lou_cannon/article/013110_lou_cannon">notes that “only 12% of Californians with homeowners insurance also have quake insurance” as offered by the California Earthquake Authority. Cannon cites premiums costing “several hundred dollars a year and the deductible is 15 percent of the home’s insured value” as the reason that 88% of Californians don’t buy quake insurance. To protect California’s already bankrupt budget, Rep. Loretta Sanchez (D-CA) and Sens. Barbara Boxer (D-CA) and Diane Feinstein (D-CA) have introduced legislation that would provide a federal guarantee for any bonds sold to reimburse losses after a major earthquake. The bill in the Senate is co-sponsored by Florida’s two senators who are trying to federalize hurricane insurance.
</p>Last week, the evidentiary phase of the <ahref="https://ecf.cand.uscourts.gov/cand/09cv2292/">trial in Perry v. Schwarzenegger came to an end. Perry is the federal court lawsuit in California that claims, in effect, that the U.S. Constitution contains a right to same-sex marriage.
</p>In another affirmation of the truism, You cant fool all of the people all of the time, President Obama’s base has noticed that his promise to push through an amnesty bill looks pretty hollow. Thirty-seven words, writes Ruben Navarrette Jr for CNN, In this weeks State of the Union address — which was more than 7,000 words long and lasted longer than an hour — all President Obama devoted to the issue of immigration reform was 37 measly words.
</p>The Presidents FY2011 budget request calls for significant increases in education spending and, as promised, the Department of Education is exempt from Obamas so-called spending freeze.