Published March 05, 2011
The conventional wisdom in Washington is that entitlement reform is political poison. In truth, it is the antidote.
Consider the bitter fighting currently taking place in Congress over a Republican plan to cut $57 billion from government spending for the final 196 days of the federal fiscal year.
The money is a relative pittance. The proposed cuts are about one seventieth of the total federal expenditures for the year and one thirtieth of the projected deficit. To eliminate the $14.2 trillion national debt, you would have to repeat the Republican plan 249 times over.
The government is profoundly broke and borrowing 40 cents of every dollar it spends. The Federal Reserve is printing money by the bale to buy up the debt and friends and foes alike the world are still extending us credit, but the cliff is now in view. Inflation, a weakened dollar and punitive borrowing rates all lie ahead.
Even so, the process of making cuts has been an exercise in demagoguery. Senate Majority Leader Harry Reid has been particularly venomous on the subject, but the players in both parties have done a reasonable imitation of a basket of rattlesnakes.
There is an ideological gap, to be sure.
The Obama Democrats want to keep up stimulus spending, still believing that their cash pumping has been the only thing that has prevented Americans from standing on bread lines for the past two years. Conservative Republicans, on the other hand, believe that all of that government intervention and deficit spending has actually retarded the recovery and done so at the risk of future fiscal calamity.
But even liberal Democrats have now mostly ceded the argument about crisis spending. President Obama signed a two-week government funding extension that included a meager $4 billion in cuts – about the same amount of debt, on average, that the government accumulated every day in 2010. It wasn’t much money, by government standards, but it was an important symbolic break from the stimulus era of the previous three years.
Now, out of political necessity, Democrats are trying to rouse themselves to the task of being thrifty, which, except for the few Blue Dogs still prowling Congress, is something of a foreign task. Their party has mostly existed to get the government to be more liberal with handouts, and reversing course is obviously a painful process.
When the White House and Senate Majority leader Harry Reid countered the Republican call for $57 billion more in cuts with a plan for reductions of $6.5 billion – about two and a half days worth of accumulated debt, you got the sense that their hearts weren’t really in it.
But beyond ideology, there is also the problem of specificity. There is a constituency for every federal dollar spent, and when you start identifying which dollars won’t get spent, people get upset.
A popular place to make cuts is in expenditures that have small effects on large problems. But there are problems of appearance there.
Democrats, for example, have proposed cutting money for highway safety and seatbelt education. Does that mean they think we should care less about the more than 30,000 people a year who die on America’s roads? Or, as one Harvard student stuck it to House Majority Leader Eric Cantor during a lecture at the university: Won’t you “save one million lives” by restoring $1.5 billion to global AIDS funding? It’s the same with the Pentagon. Those who call for defense cuts, no matter how modest, are open to accusations of being soft on defense.
Most troublesome, though, are the cuts to “gimme” programs. These subsidies, carve outs and other porky tidbits were developed by members of past Congresses to get reelected by spending other people’s money. Iowa Republicans are all for fiscal conservancy until you talk about ethanol.
One man’s boondoggle is always another man’s investment in the future.
As Republicans chisel away, they make enemies every step of the way. The cuts are a sign of a new fiscal restraint from Republicans in Congress to their party’s skeptical base and an important part of setting a new benchmark for the size of the federal government going forward, but they come with political costs.
The widespread belief in Washington is that these cuts are the easy part of fiscal reform. The hard part, say the Beltway soothsayers, is making changes to entitlement programs like Social Security and Medicare.
Much has been made of this week’s Wall Street Journal/NBC News poll that said 54 percent of Americans were opposed to cutting Medicare to battle the deficit and half were opposed to cutting Social Security for the same purpose.
Coming a month after Obama ran away from the programs already eating the country out of budgetary house and home, the poll has confirmed to many that the chances of reform are next to nil. It is widely believed that Republicans are walking into a trap as they prepare to propose a long-term plan for taming entitlements. Speaker John Boehner is getting ready to touch “the third rail of American politics” and is bound to be electrocuted.
But the generally excellent Journal poll asked a lousy question, and one that reflects the addled conventional wisdom of Washington.
No one has suggested cutting Medicare and Medicaid to “reduce the budget deficit.” Even the hawkiest hawk would say that they are opposed to cutting those benefits to balance the deficit. Tame the debt over time? Yes. Cut the current deficit? No way.
The better questions in the poll were the ones asked about the actual proposals on the table.
On increasing the retirement age to 69 over the next 64 years, 56 percent of respondents were OK with the idea compared to 42 percent who were opposed. More surprising, 44 percent were amenable to turning Medicare into a voucher program.
The current discussion in Washington is exceptionally facile even for this town because there is real political opportunity here for both parties. Boehner knows it and Obama likely does too.
The question is if the president is ready to give up Social Security scare mongering as a Democratic campaign tool for 2012. So far, it appears that he is not. Aside from dodging the issue in his budget, Obama has also seen his budget boss, Jack Lew, take a public position that Social Security will be in the black for decades.
If the administration is arguing that Social Security is solvent because it holds $7 trillion in IOUs from the federal government (Medicare is owed $36 trillion by the Treasury), it would suggest that Obama is not ready to lay down the political cudgel .
But Boehner is certainly going to push him to get serious on the subject. And it is an audacious political move.
So far, Republicans have focused on lower risk but lower yield fiscal reforms. When the speaker unveils his plan for fixing entitlements, the risks will be big, but so are the potential rewards.
And if Obama cedes the issue to Republicans in the name of keep alive the oldest trick in the Democratic book he might also lose his chance to shake the liberal label ahead of his reelection bid.
Chris Stirewalt is FOX News’ digital politics editor. His political note, Power Play, is available every weekday morning at FOXNEWS.COM.