April 11, 2013
At a Republican presidential debate in 2011, all eight candidates on the stage said they would reject a budget deal that raised taxes even if it had $10 of spending cuts for every dollar of tax increases. At Tuesday's protest, I put the reverse question to participants: Could they accept a dollar of cuts in Medicare and Social Security benefits for every $10 of increased taxes on corporations and the wealthy? All (the leaders) I asked said they would decline.
— Dana Milbank, The Washington Post
President Barack Obama on Wednesday added his fiscal 2014 budget proposal to the pile of rival proposals also not likely to become law. The White House document has much for centrists to dislike: Over the next decade the president's spending plan (a) would add another $5.2 trillion to federal taxpayers' debt and (b) still wouldn't come close to balancing in any of those 10 years.
But what's remarkable about Obama's proposal has less to do with numbers than with policy choices: For the first time in the five annual budgets he has offered, the president proposes cuts to the growth of Medicare and Social Security. That's an excellent if four-years-overdue gesture from Obama, who, even before he took office, pledged to salvage our unsustainable entitlement programs. We welcome him to the serious national discussion about how to reform programs that are on paths to insolvency — and that also are the biggest drivers of total federal deficits.
This step by Obama is more than symbolic. Yes, he offered more dramatic proposals in 2011 during unsuccessful deficits-and-debt talks with House Speaker John Boehner: At one point Obama was willing to raise the Medicare eligibility age from 65 to 67; at another point he proposed $320 billion in Medicare and Medicaid cuts over 10 years. During private talks with Republicans he also has offered to cut spending on Social Security.
This proposal would constrict Medicare spending on beneficiaries and health providers, and would apply a stingier inflation measure to Social Security and other programs. The inflation change alone would produce $230 billion in savings — that is, $130 billion less in benefit payouts plus $100 billion in new revenue from tax bracket creep — over 10 years. That's modest retrenchment for a government whose annual deficit topped $1 trillion each of the last four years.
But a president who enshrines cuts to entitlement programs in his own proposed budget takes far greater risks than he does in making similar offers during the cloistered give-and-take of bargaining scrums. Although the White House declared Obama's proposals to be his final offer — not his opening bid — to Republicans, the truth likely is anything but: By announcing that he wants entitlement trims along with tax hikes, the president signals that he's open for business.
In the eyes of angry liberals, he now owns whatever cuts occur. He's also crimped the ability of Democrats to mount future "Mediscare" campaigns against Paul Ryan and other Republicans who would restructure that program so it survives for future generations.
So there was no surprise at Tuesday's pre-budget protest in Washington that an infuriated Sen. Bernie Sanders, I-Vt., thundered, "When Barack Obama was running for president in 2008, he said that he would not cut Social Security. We want the president to remember what he said and not go back on his word!"
If you're scoring this at home, be aware of some crucial context: This year's budget maneuvers are only partly about ... budgets. Even the president's budget authors acknowledge that much of his proposal has been cut and pasted from the plan Republicans rejected during the so-called fiscal cliff talks four months ago.
To Republican eyes, then, much of what Obama proposes isn't calculated to pick new fights with them — it's an almost comforting more-of-the-same. Example: In round numbers, the $1.8 trillion in deficit cuts that Obama proposes over the next decade equals the $1.2 trillion in sequestration cuts he would scuttle, plus $600 billion in tax hikes on the wealthy.
Republicans will remind him that they helped avoid the fiscal cliff by giving Obama $600 billion in tax increases. But look past the posturing. Obama's plan may anger the left more than it does the right. The man has his reasons. He wants Republican help to pass two of his highest priorities — gun control and immigration — while protecting a third: The rollout of Obamacare is already threatened by bureaucratic glitches, slipping deadlines and fears of runaway costs for many insurance buyers.
Add that up and you have a president suddenly eager to break bread with his opponents rather than antagonize them. Sure enough, Obama is breaking bread, and his budget won't seriously rile the GOP. Besides, many members of Congress see his proposal not just as two months past its due date, but as functionally irrelevant: The Democratic Senate and Republican House already passed their rival budget plans. So what's up?
Our hunch is that Obama, by coupling more deficit spending with some entitlement constraint, is triangulating — hoping to look more reasonable than those spendthrift Senate Democrats or those hard-hearted House Republicans. If so, fine; that's how, in the mid-1990s, President Bill Clinton got many liberals to tolerate welfare reform.
But don't miss the biggest takeaway here: Obama formally proposed reductions in the growth of entitlement spending. For that first step, we thank him: The greater the slowing of that growth, the greater the possibility that today's Americans preserve Medicare and Social Security for tomorrow's.
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