As we near another biennial election it is increasingly clear that those whom we elect to represent us in a new Congress will be facing the most complex and contentious issue of a generation when they take office this January – and I don’t mean the Iraq War. As tragic and costly as the Iraq War is, it pales in political terms to the face-off between the generations that will take place around our nation’s increasing budget deficit and growing debt; our failures to provide basic healthcare to a growing number of our citizens and the looming failure of our pensions and retirement security. The convergence of these issues as the boomer generation grows older and lives longer will create a longevity divide that will force politicians and policy makers to choose between old and young and rich and poor.

As the baby boomer generation begins to age, we are placing added pressure on an already strained and dysfunctional healthcare system to keep us well and to live longer. According to the Department of Health and Human Services, by 2015 healthcare spending will make up 15% of GDP – up from 16% today. By 2030 healthcare spending is projected to top 25% of GDP making healthcare the leading driver of the U.S. economy. There’s no doubt about it, our $30,000 hip replacements, $10,000 a night stays in hospital rooms, and our new pharmaceuticals to control high blood pressure, diabetes and stave off Alzheimers Disease, will cost a lot of money. And boomers, the richest generation in history, will pony up, giving up our big homes, third cars and extra vacations to live a few extra years. But, not every boomer will be able to keep pace

The social safety net that has protected two generations since FDR has become frayed and increasingly fragile – more important it has become unaffordable. At the edge of this coming storm we find ourselves already underwater. The national debt is at $8.5 trillion and we are running the highest budget deficits -- $337 billion -- in world history, fueled in part by an Iraq War that has been charged to our national credit card. According to last week’s Wall Street Journal, the United States finds ourselves with approximately $80 trillion in unfunded future entitlement liabilities (Social Security, Medicare and Medicaid), which is 6 times larger than the U.S. economy and 16 times the federal debt held by the public. Future workers, Gen X and Y and our grandkids, will have to pay tax rates as high as 80% to fund these ‘promises’, or these entitlement programs – the social safety net that many boomers have counted on in the calculations around healthcare and retirement – must be allowed to leave millions of boomers behind.

The balance sheet is so bad today that there is a growing school of thought that the United States has slipped into bankruptcy. Boston University economist, Laurence Kotlikoff, has called for radical reforms of our economic institutions making the case that our economic position is not sustainable. The Journal argues that Kotlikoff’s dire predictions of national bankruptcy are overstated and that, while the fiscal mess we find ourselves in is surely serious and difficult, our balance sheet is better than it appears and that sustained economic growth and a reduction in entitlements for boomers, and our children, are the places to begin to find solutions.

Kotlikoff and the Journal have set up the next great debate for two generations. Is an entitlement a promise? Can tax cuts be sustained in the face of a mountain of debt? Will the growing political power of boomers set off a generational war that pits the needs of parents against the futures of their grandchildren?

We can count on the new Congress – whether Republican or Democrat – to run as fast as they can from the storm clouds gathering. But, this storm is a full category 5 in politics. And, the flood walls are not strong enough to keep the waters from rushing in and causing financial and personal ruin. The result of the next few years of debate will be a very different America – it will transform us as the New Deal did in answer to a great fiscal and societal crisis 73 years ago. The longevity divide will require a transformation of the way we view government and its role in our lives. It is already requiring businesses to rethink who they hire and how long we work. It will require us to redefine the American Dream.

Posted by: Lane Bailey, Worldwide Director Public Affairs, GolinHarris