Saturday, November 11, 2006

Now what?

The Economist (UK) on the Democrats’ plans: “Old-timers will run the House, but their agenda is not clear

Less clear is whether Ms Pelosi and her generals can push a coherent agenda of their own. The Democrats’ equivalent of the “Contract with America” is a 31-page pamphlet called “A new direction for America”, boiled down for campaign purposes to “Six for ’06”, a six-pronged action plan that Ms Pelosi promises to enact within 100 hours of becoming speaker.

Unfortunately, this “agenda” is little more than a series of soundbites designed to show that Democrats care about the plight of ordinary workers. There are pledges to raise the minimum wage, expand tax-break subsidies for college, “free America from dependence on foreign oil” by boosting alternative fuels and ending tax giveaways to big oil, allow the government to negotiate lower prices with drug firms, promote stem-cell research, and stop any plans to privatise Social Security.

The plan says nothing about some of the tougher issues facing America’s legislature. Not a word about how Democrats might fix Social Security’s finances. No mention of how they will deal with the Alternative Minimum Tax which will, without new legislation, hit 22m Americans in 2007, up from 3.4m in 2006. Worse, the proposals are internally inconsistent. There is a promise to end the Republicans’ fiscal profligacy by reinstating budget rules that require tax cuts and spending increases to be matched by savings elsewhere. But there is no explanation of how the Democrats’ own pet tax cuts or spending increases would be paid for.
And let me beat this drum again: all those things that people call the “government” – including college loans, energy research, defense, park rangers, food safety, etc. – will disappear unless the entitlement crisis is managed. We’re getting perilously close to the last chance to reform Medicare and Social Security before millions of baby boomers roll the U.S. Treasury.

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