House majority leader Steny Hoyer has an article in today’s Wall Street Journal of unvarnished audacity titled “We Can't Run Deficits Forever - Controlling entitlements is the next priority.” Let’s jump to the key graf:
But the single most important thing we can do to get our budget under control is to deal with the costs of our entitlement programs: Social Security, Medicare and Medicaid. Fixing Medicare and Medicaid is inseparable from health-care reform. We will never be able to control the growth in spending of these programs as long as health-care costs continue to increase at more than twice the rate of inflation. We know the policy options necessary to make Social Security fiscally sound: restraining the growth of benefits, bringing more revenues into the system, and raising the retirement age, among others. We simply need the bipartisan will to choose and implement such reforms. This will be an excellent test of the Republicans' newfound commitment to fiscal discipline.Hoyer either has a short memory or enormous cojones to suggest that – now – Republicans need to be the honest brokers of entitlement reform. Remember this “crucial moment of cooperation”?
I suspect that the GOP is tired of playing Charlie Brown to the Democrats’ football-holding Lucy. The Dems are in charge of all legislative levels of government so I’ll give them this advice: you first. Let’s see the Democrats’ plan first and then the Republicans can steal all the tricks from the Dems’ playbook. Let's try out the big cudgel:
“Restraining the growth of benefits” = Grandma is going to have to subsist on cat food
“Bringing more revenues into the system” = Sky-high tax hikes on working Americans
“Raising the retirement age” = Who won’t see benefits until after they’re dead
Don’t come crying to the GOP that you want bipartisanship. What the Democrats really want is political cover for the hard choices that must be made before the wave of Baby Boomers swamps the ship of state. It's all you, baby.
Extra - Andrew Biggs: "Growing costs"
6 comments:
The biggest financial cataclysm in living memory. Not enough to illustrate the folly that was averted when Bush's "plan" was snuffed? John Lennon was wrong; apparently instant karma DOESN'T "knock you right on the head."
So now it's Plan B. "If I can't have my privatization, YOU fix it, while we heckle." Here's wishing your currently regional party lots of success with that tack.
It's funny how I never get these arguments when the stock market is going UP, only down. I think we both know that a worker investing in the stock market over a 40-year period of a working life will make out much better (even with the occasional crash) than the less-than-1% return on Social Security now.
Also, if memory serves, Dubya tried to argue for personal accounts but only investing in Treasury bills (just like the Social Security administration does now). It would essentially serve the same purpose but workers could bequeath their savings in case they died before retirement. No dice, said the Democrats, we'd much rather have the 1) money and 2) the issue.
It's your problem now, let's see the big solutions that "won't tax people earning less than $250,000...not one penny."
Also, a presidential party typically loses seats in the first midterm after a new President takes over. Obama's historic overreach and debt explosion isn't going to wear well in the near-term. NY-12, anybody?
So it's root, root, root for the home team.
I'm one of your biggest fans, Mr. Pundit, but I respectfully suggest your reaction to Hoyer's piece seems like that of someone who is just plain stuck in a partisan fight mode.
Hoyer says we should reinstate the fiscally conservative(and smart) 'pay as you go' rule. This rule was dropped by Bush II (during a period when the GOP controlled all branches of government). I have to believe you are in favor of that.
Hoyer says we have to deal with skyrocketing entitlements, which is a recurring theme on this blog.
The first part of the excerpt presented here reads like it could have been written by the Viking Pundit hisself. The last sentence is a tweak on the GOP for moving back to their fiscally conservative roots now that it is politically easy to do so, and challenging them not to play the contrarian role to grab votes. Isn't Hoyer saying "It's a big s#*t sandwich and we're all gonna have to take a bite."?
It's just politics and they're all policians. If the GOP actually held to conservative and libertarian principals you might be able to argue they have some kind of philosophical superiority over the Democrats.
America desperately needs new political parties and new ideas.
In the absence of that it would be great to see both camps use this financial crisis to find ways to come together, share ideas and compromise. Let's hope they all put the welfare of this country above their desire to get re-elected. I'm not holding my breath.
Also, a presidential party typically loses seats in the first midterm after a new President takes over. Obama's historic overreach and debt explosion isn't going to wear well in the near-term. NY-12, anybody?
NY-12 has been a Democratic seat since 1961. The Republicans have held it for only 8 of the past 130 years. Last year, the voting split was roughly 90-10.
You may be thinking of NY-20, which just held a special election this week (Tedisco-Murphy). That one ended in a virtual dead heat, and will be decided by absentee ballots.
NY-20 has been held by the Republicans for most of the last quarter-century (1984-88, 1992-2006). Before that, it was a traditionally Democratic district.
The 2009 election's going into overtime. In a district where registered Republicans outnumber Democrats 42% to 26%. And the Democrat candidate was a relative unknown who began the race far behind in the polls. That's NOT a sign of imminent G.O.P. resurgence.
While the House is permanently up for grabs, next year's contested Senate seats are *heavily* tilted towards further Democratic gains. Waiting on the historic 2010 correction is not something that realistic Republicans should keep in their hope chests.
Concur with Nigel Tufnel above. Didn't you recently post one of those "Obama said something and the market immediately dropped!" items? Now you're promoting the longview position of inevitable, inexorable growth. A little contradictory, no?
Also, if memory serves, Dubya tried to argue for personal accounts but only investing in Treasury bills (just like the Social Security administration does now).
Not quite. Bush's "plan" was deliberately vague, which was poor salesmanship after the wild success of his Iraq "plan." Nevetheless, it would have included purchases of stocks and bonds.
Despite Bush's rhetoric ("best of all, the money in the account is yours, and the government can never take it away"), people could not have borrowed from their own personal accounts, which would have been administered for a fee. Upon retirement, the government would have taken a portion of "your" money and converted it to an annuity payment. Only after this mandatory payment plus the standard Social Security benefit equalled the poverty level would the remainder (if any) belong to the person.
Most pertinently, private Social Security accounts would do nothing to shore up the system's finances. Quite the reverse. No explanation was given to account for the shortfall to the system from diverting or bequeathing money. As it pertains to current retirees, the lost cash flow would have required several trillions in additional federal borrowing. Amid all the profitprofitprofit! pitching, nothing was said about what would happen to people who lost much or all of their private account savings. Probable "solution": MORE borrowing.
Also, linking the system to the cyclical ebbs of the market would have made the timing of one's retirement all-important. Good year? No problem. But if Social Security had been revamped just a decade ago along the lines semi-quasi-sort-of-proposed by Bush, it would've required HUGE repairs now, in 2009, to address the failure of the privatized system and the millions of people retiring this year. "Not all investments increase, some do go down in value" is standard small print for an Ameritrade TV commercial, but it's not so wise for Social Security.
OK, your (plural) criticism is well-taken.
Policy-wise, I've been on record that the retirement age must be increased as a no-brainer first step. Personal accounts may be off the table but benefits need to be shaved, possibly by re-indexing. But since something like 80% of Americans pay more in payroll taxes than incomes taxes, I can't support raising the FICA tax - which started at 2% and is now 12.4% - on working Americans.
Politics-wise, I agree that this is not the time to be petulant. But the challenges of entitlement reform and the proposed solutions would be easier for everybody if action were taken NOW instead of waiting for a crisis. Then the pain could be spread over years. The Democrats have used entitlement reform as a cudgel, year after year. I just think it takes tremendous balls to suggest, as Hoyer does, that the GOP needs to step up.
The only idea that will work is a bipartisan panel that gives a reform proposal that Congress MUST vote on, up or down.
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