A former cabinet official has warned lawmakers there are huge unfunded government liabilities for old age pensions and healthcare that could destabilize the economy in coming years. VOA's Barry Wood reports that Peter Peterson, a former U.S. commerce secretary, says politicians pretend the problem does not exist.
Peterson says the debt problem is far worse than politicians admit. He faults both major parties for failing to address the exploding costs of social security and particularly medical care for the elderly, the program called Medicare.
"Its unfunded liabilities are about five times bigger than social security's," he said. "Medicare costs are projected to grow three times faster than social security. Remember how casually we passed the Medicare prescription drug bill [of 2003]? You may not know that the unfunded liability of that one program alone exceeds the entire unfunded liability of social security."
Medicare taxes, says Peterson, would have to be tripled to pay for the program.
Peterson spoke Tuesday at a forum at John Hopkins University.
A day after the government's $2.9 trillion 2008 budget was released, Treasury Secretary Henry Paulson says the deficit problem is likely to get worse without action.
"We will deal with these issues, whether it is today or whether it is years in the future," he added. "But the longer we wait to deal with the problem the more costly it is going to be in terms of the cost to our economy overall, or future benefit reductions, or what will happen to the future generations, or in terms of competitiveness."
Peterson, who heads the Blackstone private equity group, says America is confronting several debt problems, including the growing budget and trade deficits and mounting indebtedness by consumers. He urged the government to should try to find a solution to America's deteriorating finance condition now.