We haven’t had the robust democratic debate about the role of government that lies at the heart of America’s budget stalemate. The truth is that most Democrats and Republicans want to avoid such a debate because it would force them into positions that, regardless of ideology, would be highly unpopular. This does not mean that the congressional supercommittee, charged with making modest cuts in deficits, need fail. There is a basis for honorable compromise. Squandering it — as seems increasingly likely — would confirm politicians’ preference for fighting over governing.
Contrary to much press coverage, the committee’s Republicans opened the door to compromise by abandoning — as they should have — opposition to tax increases. Sen. Patrick Toomey of Pennsylvania proposed a tax “reform” that would raise income taxes by $250 billion over a decade. First, he would impose across-the-board reductions of most itemized deductions and use the resulting revenue gains to cut all tax rates. Next, he would adjust the rates for the top two brackets so that they’d be high enough to produce the $250 billion. All the tax increase would fall on people in the top brackets.
Senate Democratic Whip Dick Durbin called Toomey’s proposal a “breakthrough.” With good reason: It came from a “no new taxes, over my dead body” Republican who had signed Grover Norquist’s pledge against any tax increases. But the details of Toomey’s plan are murky, and many Democrats claim that it would cut taxes for the rich. Democrats also didn’t respond with an equal concession: a willingness to deal with Social Security and Medicare.
As is known, these “entitlements” are the central cause of long-term budget deficits. From 2005 to 2035, their cost will nearly double as a share of national income, projects the Congressional Budget Office. How big a government do we want? What’s the balance of fairness between young and old? How much should other programs be reduced or taxes raised? Many Democrats duck the fundamental policy questions and reject any benefit cuts.
Only President Obama can start such a debate. He has the bully pulpit, but he hasn’t used it. Here’s an exchange between ABC White House correspondent Jake Tapper and the president, at a July 15 news conference, that captures Obama’s calculated obscurity.
Tapper: “In the interest of transparency, leadership and also showing the American people that you have been negotiating (with Republicans) in good faith, can you tell us one structural reform that you are willing to make to one of these entitlement programs that would have a major effect on the deficit? Would you be willing to raise the retirement age? Would you be willing to means test Social Security or Medicare?”
Obama: “We’ve said that we are willing to look at all these approaches. I’ve laid out some criteria in terms of what would be acceptable. So, for example, I’ve said very clearly that we should make sure that current beneficiaries as much as possible are not affected. But we should look at what can we do in the out-years, so that over time some of these programs are more sustainable. I’ve said that means testing on Medicare, meaning people like myself, if — I’m going to be turning 50 in a week. So I’m starting to think a little bit more about Medicare eligibility. (Laughter.) Yes, I’m going to get my AARP card soon — and the discounts. But you can envision a situation where for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate.”
Noncommittal gibberish. There is no leadership from the nation’s “leader.” Space precludes running all his rambling response; the excerpt above was about half. Tapper followed up.
Tapper: “And the retirement age?”
Obama: “I’m not going to get into specifics.”
Well, there you have it. The president won’t talk specifics, but government consists of specifics. The reason we cannot have a large budget deal is that Americans haven’t been prepared for one. The president hasn’t educated them, and so they can’t support what they don’t understand. Left or right, there are no comfortable positions. No one relishes curbing Social Security or Medicare benefits. But without changes, taxes will go way up, the rest of government will shrink dramatically or huge deficits will persist.
What we could have is a small budget deal. Deficits over the next decade could easily exceed $9 trillion; proposals by Republicans and Democrats might cut this by about $1.5 trillion. Toomey’s concession created a basis for a negotiation, if both sides wanted an agreement. Small successes today could rebuild trust, leading to larger successes tomorrow. Failure will further corrode the public’s already rock-bottom confidence in its political “leaders.”