FACT CHECK: Is Climate Change A ‘Bigger Fiscal Issue’ Than Entitlements?
Senator Brian Schatz (D-HI) tweeted, “Climate change is a bigger fiscal issue than entitlements,” in response to a new Government Accountability Office report estimating that federal government spends billions of dollars due to climate change each year, and is unprepared for impending increases in these costs.
The GAO report found that the federal government “incurred direct cost of more than $350 billion because of extreme weather and fire events” over the last decade, and costs could increase up to $35 billion a year by 2050.
Entitlement spending Social Security already costs $916 billion per year, and Medicare, Medicaid, CHIP, and marketplace subsidies already cost $1 trillion per year, and is facing insolvency within the next few decades.
While the GAO’s spending projection for disaster relief it significant, it is a fraction of current costs and annual spending increases on entitlements.
The GAO report’s estimates that the federal government spent an average of $31 billion per year responding to extreme weather over the last 10 years, and that federal spending on activities addressing extreme weather events due to climate change could increase by $12 billion to $35 billion per year by 2050. That would be the equivalent of $9 billion to $28 billion in today’s economy.
Spending on Social Security is already increasing at a faster pace: an average of $31 billion per year, from $440 billion in 2005 to $750 billion in 2015.
“The primary cause of the nation’s fiscal problems, now and in the future, is the rapid rise in entitlement spending,” wrote James C. Capretta, resident fellow at the American Enterprise Institute.
Entitlement programs accounted for about half of the $3.9 trillion 2016 federal budget. According to the Center on Budget and Policy Priorities, the government spent $916 billion on Social Security, or about 24 percent of the budget. Another $1 trillion, 26 percent of the budget, was spent on Medicare, Medicaid, the Children’s Health Insurance Program, and Affordable Care Act subsidy and exchange costs.
Entitlement spending programs face insolvency in the next few decades. In July, a report said the Social Security trust fund will be tapped by 2034, and the Medicare Part A fund would be tapped by 2029. The entitlement crisis looms as the US budget is on track to reach $1 trillion by 2020, with the current national debt over $20 trillion.
Furthermore, Congress is required to authorize entitlement spending, but not disaster relief spending. Almost all entitlement spending is mandatory, and disaster relief spending is discretionary.
Although the GAO report may have exposed that the federal government is unprepared for the projected disaster spending due to global warming, the scale of entitlement spending dwarfs it. The mandatory requirement makes entitlement issues permanent, and depleting funds make entitlement issues urgent.
Senator Schatz was undoubtedly incorrect when he said that climate change is a bigger fiscal issue than entitlements.