In ironic coincidence, in the same week that here in NJ the Legislature was enacting historic entitlement reform on a bi-partisan basis, the non-partisan Congressional Budget Office released its annual Long-Term Budget Outlook, which reports that the national debt may increase more than 30% in the next 10 years due in part to exploding federal entitlements.
The CBO reports that the national debt might reach 101% of national GDP by 2021, in part because federal policy-makers refuse to touch the “third rail” of national politics – federal entitlements.
In stark contrast, NJ policy-makers led by Governor Christie enacted reforms which will reduce public pension costs by more than $100 billion over 30 years, and reduce public medical benefit exposure by more than $3 billion over the next 10 years.
These reforms were enacted in response to NJ’s own exploding entitlement debt crisis, reflected by NJ’s $100 billion-plus deficit in its unfunded pension and medical liabilities, which were the cause in part of NJ’s high-tax, unfavorable business climate which is robbing our children’s economic future. NJ’s unfunded liabilities were the largest in the nation.
Sadly, President Obama has refused to show any leadership on this issue. When his own bi-partisan Social Security Commission earlier this year released its Blue Ribbon report, which called for a mix of spending cuts and tax increases, he promptly made 2 copies of it – one that he put on the shelf to gather dust, and the other he put in the can that he is kicking down the road for the next generation to deal with.
Federal officials could learn from the adult leadership shown by the Governor, Republican legislators, and several noteworthy Democrat legislators, led by Speaker Oliver and Senate President Sweeney, who at great political risk to themselves, dared to stand for a better economic future for all of NJ.
Let’s hope Washington paid attention to what happened this week in NJ.