Hard Choices: More Taxes, Fewer Benefits, or Less Real Property Waste

How does a 122 percent increase in payroll taxes sound? Not too good? Well, how about cutting some Medicare benefits in half? That’s what it may take to keep Medicare and Social Security from drying up and blowing away.

Now’s the time for us all to start aggressively right-sizing the Federal real property inventory.

By estimates from the Office of Management and Budget (OMB), surplus real property costs American taxpayers at least $130 billion annually in unnecessary maintenance and security costs.

Let’s put that number into Reagan-like perspective. If you took the $130 billion that could be saved on maintaining unneeded Federal real property, and you laid each dollar end-to-end, you’d string together a line of dollar bills that would:

• Go around the world more than 494 times
• Go to the moon and back more than 25 times
• Go to the International Space Station and back 27,978 times

A funny way to grasp an enormous number, granted. Consider, however, that for many of us the Social Security and Medicare funding crisis is looming large on the horizon. Baby boomers become eligible for Medicare in 2011 – less than four years from now. Eight years later, according to a 2007 summary report of the Trustees of the Social Security and Medicare Trust Funds, the Medicare Hospital Insurance (HI) Trust Fund will start to run out of money.

By 2019, the trustees claim, “tax income will be sufficient to pay only 79 percent of HI costs.”

“The program could be brought into actuarial balance over the next 75 years by an immediate 122 percent increase in the payroll tax, or an immediate 51 percent reduction in program outlays or some combination of the two,” the trustees said.

The key word in each of those options is “immediate.” Not tomorrow, not next week. Now. If changes are delayed or phased in – or we want the program to last longer than 75 years – the trustees predict that “adjustments of greater magnitude would be necessary.”

Does it really need to be this way?

Certainly, $130 billion is a small percentage of the estimated $32 trillion owed by Medicare. But isn’t it worth saving, if it means making a worthwhile contribution in the face of the hard choice looming between the unappetizing options of increased taxes or reduced benefits?

As an unfunded mandate, real property asset management pales when compared to an agency’s mission-critical tasks. As a way to protect our own future – and the futures of our children and grandchildren, it’s an obligation we can’t afford to put off.

We’re wasting enough money to circumnavigate the globe almost 500 times a year. Let’s start putting it to a more noble purpose.

Not tomorrow, not next week. Now.


David Baxa
President and CEO
VISTA