Breaking Down The Big 3
KAYE: Welcome back. In a few minutes, we'll hear President Obama's plan the for reducing the nation's debt and trimming the federal budget. The president will also talk about strengthening Medicare, Medicaid, along with Social Security. These three entitlement programs make up a big part of the federal budget, but cuts to these programs could cost you some big bucks. So, Don Lemon is here to fill us in on exactly what this all means.</s>DON LEMON, CNN CORRESPONDENT: A big part of the federal budget, and if you look at, Randi, over the next 11, 12 years, $40 trillion. Imagine having to deal with that. But it makes up a big part of the budget, as I said, 40 percent of the budget - 40 percent of the budget comes from entitlements like Social Security, Medicare, Medicaid. Look at this, 24.4 percent, that comes straight from Medicare -- 12.8 percent from Medicaid -- excuse, 12.8 percent for Medicare, 7.2 percent for Medicaid, 20.4 from Social Security, pardon me. So, that's a big, big chunk of the budget.</s>KAYE: Sure.</s>LEMON: And then when -- these are places where changes can be made, but people in Washington are reluctant to it. They're hesitant to do it, because people paid into these and they want them, right? So -- these so-called entitlements. If you look at this, this is what happened in 2010, just about now, we're in 2011. You've got three workers to support every retiree, that's what you have now. But by the time those baby boomers start -- at the height of their retirement in 2035, Randi, you'll only have two workers in the workforce to support one retiree and that's because all those people will have left the work force and you won't have -</s>KAYE: That's why it's running out of money.</s>LEMON: And that's why it is running out of money. And, look, 1975, 24 million people were enrolled in Medicare. 2010, last year, 47 million. That's almost double that. And then by 2040, look at that, 88 million people. And here's what they're paying. 1975 here, 24 million, they were paying about $2,800. That's what the government was paying per person. Here, 2010, about $12,000 per person and you've got 47 million. It jumps here to $44,000 that the government is paying in per person. And if you're looking at that at 88 million, you do the math. That is a lot of money.</s>KAYE: So more and more people need the program and there just isn't enough people --</s>LEMON: More and more people --</s>KAYE: There are not enough people contributing.</s>LEMON: Not enough people contributing. So they're going to have to do something that they can't really -- they can't cut that much from it because they need the money, but they're going to have to re- jigger and change somehow and let's see if the president's going to talk about it. Who knows. But, of course, Republicans will have their rebuttal and they'll say, hey, that Paul Ryan budget, it was all in there and it will be back and forth. But that's a lot of money.</s>KAYE: Is that your prediction? Can we write -- make that official?</s>LEMON: oh, of course. Oh, you mean there's going to be consternation in Washington about --</s>KAYE: You heard it here.</s>LEMON: Oh, the Democrats said this and the Republicans said that.</s>KAY: I never would have expected that.</s>LEMON: Who would have thought. Yes, I will predict that.</s>KAYE: All right, Don, thank you. And thank you for this explainer as well. Appreciate it.</s>LEMON: Thank you, Randi.</s>KAYE: We're a little more than 15 minutes away from President Obama's speech to lay out his blueprint for dealing with the nation's $14 trillion debt. Wolf Blitzer will be joining me shortly. So keep it right here for the speech and analysis from the best political team on television. Up next, is your bank pulling a fast one on you? A new study finds banks may be hiding fees from you. We'll tell you what these fees are and how to avoid them in "Your Money." Keep it here.