THE PUBLIC POLICY: The Politics of Entitlement Reform
Klein, Philip
THE PU BLIC POLICY N NOVEMBER 4, 2004, a giddy President Bush stood before reporters in his first press conference after winning re-election, and declared, "I earned capital in the campaign,...
...He moved the ball down the field," Toomey said...
...He said the solution to reforming the health-care entitlements isn't to pass one giant piece of legislation, but to pass a series of smaller measures that would improve the health-care system, such as expanding health savings accounts...
...Armey points out that Democrats have a history of using the issue to tar Republicans, starting with the 1964 presidential campaign, in which Barry Goldwater was torn apart for proposing to make Social Security voluntary...
...But by flirting with Social Security reform and then abandoning it, Republicans enabled Democrats to scare voters, and because nothing passed, there was no reality check to demonstrate to voters that those scare tactics were baseless...
...The lesson of welfare reform, Armey explained, is that if lawmakers actually achieve something, it will be looked back on as a success...
...The only way we're ever going to get any momentum built on this is if people, members of Congress and the American public, put aside partisan differences and take a look at what the cold, hard, facts In a paper published over the summer about the crisis, economist Laurence Kotlikoff asked, "Is the United States Bankrupt...
...If there is a renewed push for entitlement reform after this fall's elections, what will it look like...
...Congressional Republicans, who did not give much support to the President on the issue to begin with, are expected to be in an even weaker position after November's elections, regardless ofwhether they manage to hang on to the House and Senate...
...experts, whether on the left or right, agree that we have a huge spending problem that's coming from entitlements...
...Pork projects such as the infamous "Bridge to Nowhere" may generate a lot of the headlines, but even if all ofthem were eliminated tomorrow, it would hardly make a dent in the nation's long-term budget outlook...
...I think what we will find out is that we talked about Social Security, we discussed it in great detail, and I don't think it will affect one congressional race," said Rep...
...Gregg, who said entitlement reform ranks right 54 THE AMERICAN SPECTATOR NOVEM~ER 2005 PHILIP KLEIN behind fighting terrorism on his list of national priorities, introduced the "Stop Over SpendingAct of 2006" (also referred to as "SOS") that includes a proposal to create an entitlements commission...
...urity, he didn't put his foot down to make sure wobbly Republicans got on board with him...
...Paul Ryan (R-WI), who was an outspoken advocate for personal accounts...
...Fueling this speculation is new Treasury Secretary Henry Paulson, who said that one of the major reasons he left his $38 million a year job as head of Goldman Sachs was to tackle entitlement reform, and he has discussed the matter extensively with President Bush...
...They tell me that politicians will demagogue this issue and use it as a political weapon...
...Defense spending, meanwhile, is only expected to grow at 2.7 percent per year during the same time period...
...But he said that House Speaker Newt Gingrich refused to give up, and made sure Republicans fell into line...
...You can pay me now or you can pay me later.' If we step up to the plate now, and we address it, we will be able to do it less painfully than if we wait until we're at the cliff...
...In my first days in office, many in Washington have told me that reform of entitlement programs is just too difficult to achieve," he said...
...As of this writing, it has 28 cosponsors-all of them Republicans...
...You set up a procedure which gets everybody in the room and gets their fingerprints on the final product," said Sen...
...When the Republican Congress achieved welfare reform in 1996, President Clinton vetoed it twice...
...Pork projects such as the infamous "Bridge to Nowhere" may generate a lot of the headlines, but even if all of them were say," said Mison Fraser, director of eco- eliminated tomorrow, it would hardly make a nomic policy at the Heritage Foundation...
...I have always tried to live by the philosophy that when there is a big problem that needs fLXing, you should run toward it, rather than away from it...
...The failure of President Bush's drive to reform Social Security was a blunt reminder that no matter how significant the entitlement crisis is, a solution remains elusive, and in some sense the prospects for constructive reform remain bleaker than ever...
...Another outcome of last year's Social Security push is that it demonstrated that the issue is no longer the third rail of American politics...
...He didn't get it across the goal line, but he moved the ball, and it's the first time any president has done that, and I think he deserves a lot of credit...
...T HE EFFORT TO REFORM Social Security may have come up short, but Toomey believes that President Bush still advanced the debate...
...The buzzword of the moment is: bipartisan...
...President Bush's proposal was also greeted with a smear campaign by anti-reform groups, most notoriously, the AARP...
...So theywill do everything in their power to make sure these people never have the chance to accumulate wealth and never have the chance to be free of government dependency...
...Nonetheless, there are stirrings in Washington about a renewed push for entitlement reform after the fall elections...
...Estimates of the long-term entitlement deficit (referred to as "unfunded liabilities") run as high as $80 trillion, which is such an absurdly massive number that it probably doesn't have any meaning to most people...
...Philip Klein is a reporter for The American Spectator...
...In a speech at Columbia University in August, Secretary Paulson called growth in entitlement spending "the biggest economic issue facing our country...
...By 2016, the big three entitlements will represent 55 percent of the budget, according to projections by the Congressional Budget Office...
...And the cold hard facts say that all dent in the nation's long-term budget outlook...
...Medicare spending particularly soared in 2006, the first year that reflected the cost of the recent addition ofthe Bush prescription drug benefit...
...When that mindset starts to sink in with what is really the core constituency ofthe Democratic Party, the Democrats are out ofpowerfor good...
...In advance of November's elections, House Minority Leader Pelosi and Senate Minority Leader Harry Reid have launched a "Golden Promise" campaign to "protect" Social Security, but so far the issue hasn't played a prominent role in this fall's races...
...If Social Security private accounts became law, senior citizens would soon realize that their benefits were unaffected and younger workers would be enjoying the option of investing part of their payroll taxes in personal accounts...
...This is an existential issue for Democrats, literally," said Pat Toomey, president of the Club for Growth...
...While there is a lot of talk about finding a bipartisan solution, according to White House spokeswoman Emily Lawrimore, "We continue to have discussions with members of Congress, but at this point in the process Democrats are reluctant to come to the table...
...It's a bit like cheering about putting out the fire in your backyard barbecue grill while your house slowly burns to the ground," said Stephen Slivinski, the director of budget studies at the Cato Institute and author of Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government...
...But bear in mind that the annual size of the entire world economy is estimated to be $60 trillion...
...If lawmakers continue to postpone doing something, fuhJre generations will face massive tax increases, and, in an often overlooked side effect, our nation's defense will suffer as Congress will be forced to cut military spending to fund entitlements...
...The former Wall Street power broker said he would not be deterred by defeatism in the capital city...
...We all knowwhat happened next...
...To Senator Gregg, the choice is clear: "It's like that old Fran oil filter ad...
...THE PU BLIC POLICY N NOVEMBER 4, 2004, a giddy President Bush stood before reporters in his first press conference after winning re-election, and declared, "I earned capital in the campaign, political capital, and now I intend to spend it...
...D ESPITE THE LONG-TERM structural deficit Ame r i c a faces, lawmakers tend to focus on yearly deficits, and Republican leaders have patted themselves on the back for a declining annual deficit that has been the result of higher tax revenues from a strong economy...
...But Ryan said he sees a better chance to reform the health-care entitlements of Medicare and Medicaid, because the problem with skyrocketing health-care costs is happening now, and affecting everybody, as opposed to the Social Security issue, which isn't a crisis just yet, and is only experienced by people over 65...
...The President didn't get up there, and say, 'This is my deal, get with me,'" Armey said, explaining that though President Bush made speeches on Social SecIf Social Security private accounts became law, senior citizens would soon realize that their benefits were unaffected and younger workers would be enjoying the option of investing part of their payroll taxes in personal accounts...
...Between now and 2016, Social Security is expected to grow at an average annual rate of 5.8 percent, Medicare at a rate of 8.2 percent, and Medicaid at 8.1 percent...
...Judd Gregg, chairman of the Budget Committee, who advocates creating a bipartisan commission with fast track authority, so that its proposals have to be voted on...
...Ifthere's one thing that Democrats know howto do successfully, it's to demagogue Social Security," said Dick Armey, former House Majority Leader and chairman of FreedomWorks...
...While it is easyto blame Democrats for the demise NOVEMBE~ 2006 THE AMERICAN SPECTATOR SS THE PUBLIC POLICY of Social Security reform, at the end of the day, Republicans controlled the House and Senate, and they proved weak-kneed by abandoning the push for reform without even putting up a fight...
...If a weakened President Bush is unable to tackle entitlements in his last two years in office, his failed bid for Social Security reform will forever symbolize how quickly his post-reelection ebullience faded, and his legacy on entitlements will be that he did more to expand them than any president since Lyndon Johnson...
...This attack on Social Security would destroy the foundation of a safe, secure retirement for millions of Americans," House Minority Leader Nancy Pelosi said in a typically inflammatory remark...
...Were lower income workers able to accumulate savings through personal retirement accounts, Toomey theorizes, they would begin to see the virtues of the marketplace and become less dependent on government...
...Unlike Social Security, which is a problem unto itself, the health-care entitlements are a symptom of the broader problem of the dysfunctional health-care system" Ryan said...
...Fix health care and you go a long way toward fixing the entitlements...
...With a swagger that now seems antique, the President reached for the so-called "third rail of American politics" and launched his crusade to reform Social Security...
...Democrats have shown little interest in reforming government programs that they have been using against Republicans for decades.And in amore fundamental sense, any attempt to reform entitlements to avert a looming crisis runs contrary to human nature, which tends to be focused on the short term...
...By contrast, Social Security, Medicare, and Medicaid cost $1.1 trillion, gobbling up over 41percent of the budget...
...There were plenty of Republicans who would have been happy to walk away," Armey recalled...
...The reality is that Democrats are unlikely to reform programs that are their bread and butter...
...Social Security in my marginal district, in my 5050 district, and my opponents don't even talk about the issue...
...56 THE AMERICAN SPECTATOR NOVEMBER 2006...
...To put it in perspective, the 9,963 spending earmarks identified by Citizens Against Government Waste in the fiscal year 2006 budget cost $29 billion, accounting for slightly more than 1 percent of all federal spending...
...His conclusion was that we may not be bankrupt yet, but that we're "clearly headed down that path...
...I was Mr...
...When President Bush made the pitch for adding personal retirement accounts to Social Security, his proposal was immediately assailed by Democrats...
Vol. 39 • November 2006 • No. 9
