"We live in a world of finite resources," says Rhode Island Treasurer Gina Raimondo, a Democrat who successfully promoted an overhaul of the state's pensions.
When she was elected in 2010, annual pension payments were 10 percent of state taxes and headed toward 20 percent. "You have less money for infrastructure, [K-12] education, affordable housing, higher education," she says.
The changes cut the $7 billion unfunded liability by $3 billion. Eligibility ages, which allowed some workers to retire in their mid-50s, are gradually rising to match Social Security's.
Generous cost-of-living adjustments that increased benefits 3 percent annually were suspended.
Whether Rhode Island's savings can be duplicated elsewhere is unclear. The problem is that spending on the elderly rises more or less automatically. It takes conscious action to reverse that.
States and localities are slowly losing control over their budgets.
Cutting pensions is hard.
Legally, earned benefits for existing retirees and workers often enjoy contractual protection in state constitutions or laws. Politically, retirees command public sympathy and are represented by powerful government employee unions.
There's one escape valve.
"States can't contract away their police powers: the ability to protect the health and welfare of their citizens," says Amy Monahan, a law professor at the University of Minnesota. They may be able to cut existing benefits if they can convince courts that these overburden other public goals.
Both Minnesota and South Dakota cut cost-of-living adjustments and were upheld by state courts, she says.
A similar change in Colorado is under appeal; so are Rhode Island's cuts.
This is a legal no-man's land, with huge discretion left to judges.
Medicaid's expansion is also on autopilot. Even without Obamacare, spending would rise significantly. Older Americans and the disabled now account for two-thirds of costs, though representing only a quarter of beneficiaries.
As the population ages, this burden will grow. Their medical care is simply more expensive.
In 2011, spending for Medicaid's average aged recipient totaled $15,931, more than five times the average cost for children, $2,851, reports CMS.
It's literally schools versus nursing homes.
We need a better balance between workers' legitimate desire for a comfortable retirement and society's larger interests.
Instead, our system favors the past over the future.
Things could be done to mitigate the bias. None would be easy or popular.
But it's first necessary to acknowledge the bias and discuss it openly. This we are far from doing.