It's crossing my mind -- now that the midterm elections are over -- to wonder what will really happen given the Republicans larger role in governing, as well as the possibility that they may take the Senate and/or the presidency in 2012. How will they govern? Assuming continuing gains for the GOP in 2012, the composition of the House and Senate still will not likely be very different than 2004 (including the fact that many of the members of Congress will be the same exact people), ergo compromising will be a necessity, right?
How will we fix the crushing budget deficits, whose causes are well-established? If you don't already realize this, the major pieces of the federal budget are: (FY 2010)
1) medicare/medicaid (20.90%)
2) social security (19.63%)
3) dept of defense (18.74%)
= ~60%
The President's budget for 2010 has total spending of the gov't at $3.55 trillion. Our budget deficit for 2010 is $1.2 trillion, or almost 1/3 of that amount.
So basically 3/5 of our entire federal budget goes to these three things (not counting special appropriations for the wars). If politicians aren't serious about cutting these three programs in careful, smart, but serious ways, then we literally cannot balance our budget.
The the long-awaited deficit reduction commission's draft report will send recommendations to the President that include extending the age of retirement and means-testing to save Social Security, overhauling and simplifying the tax code while lowering rates for the wealthy, and some other interesting items. They couldn't get enough agreement on the proposals to make it a final report, because 14 out of 18 members couldn't agree on this. Paul Krugman thinks that lowering income taxes even further on billionaires is a ridiculous way to balance the budget. I'm not expert enough to analyze the merits of these recommendations on the economics. What I do know, however, is that Social Security has always been the "third rail" in politics -- touch it and you're dead.
Introducing the proposed changes into Social Security that will basically give the shaft to lower-income people, regardless of the fiscal merits, is simply not going to happen. It is a political non-starter. And, surprisingly to some of my conservative friends, this is *even more* true of Republicans than Democrats. Listen to SC Republican Senator Jim DeMint -- one of the most right-wing of all Republicans, if not *the* most right-wing -- commenting on Meet the Press about the concept of overhauling Social Security:
GREGORY: I want to be very specific, because going back to 2008 spending levels will not get anywhere close to balancing the budget. So, you're saying that everything has to be on the table. Cuts in defense. Cuts in Medicare. Cuts in Social Security. Is that right?Mark my words: while people may loathe Democrats and accuse them of having a "tax and spend" mentality, Republicans will be bigger spenders,just as they always have been, but without the honesty of even trying to balance the budget, just as they always have been. Compare the two parties' approaches to health care:
DEMINT: Well, no, we're not talking about cuts in Social Security. If we can just cut the administrative waste, we can cut hundreds of billions of dollars a year at the federal level. So, before we start cutting -- I mean, we need to keep our promises to seniors, David. And cutting benefits to seniors is not on the table.
GREGORY: But then, but where do you make the cuts? I mean, if you're protecting everything for the most potent political groups, like seniors, who go out and vote, where are you really gonna balance the budget?
DEMINT: Well, look at Paul Ryan's roadmap to the future. We see a clear path to moving back to a balanced budget over time. Again, the plans are on the table. We don't have to cut benefits for seniors. And we don't need to cut Medicare -- like the Democrats did in this big Obamacare bill. We can restore sanity in Washington without cutting any benefits to seniors or veterans.
When Republicans passed the Medicare drug benefit (Part D) of 2003, they lied about its costs and just pretended it didn't have to be paid for. Pop quiz: which costs more -- the GOP's Part D or the Dems' health care reform?
Ans: Part D. Part D is estimated to cost $951 billion over the decade 2009-2018. (See Table III.C.19, page 120, shown below) In addition, the cost of that plan only grows with time as our aging population increases. Almost every penny of that is pure deficit spending.
Republicans wrote the bill so that big pharma companies get far more money from Medicare Part D for the exact same drugs than the Dept of Veterans Affairs pays for them. In the House, only 25 Republicans voted against the budget-busting bill while all but 16 Democrats voted no. The main player in writing the legislation in the House left his job and took a $2 million a year lobbying job with...a pharmaceutical company...(all facts that have been documented pretty easily by lots of principled people)
What about the other major political party and their health care reform bill (ACA)?
The Dems' plan requires $382 billion of spending total over the period 2010 - 2019 to expand insurance coverage and close the Part D "donut hole". (See Table 2, page 18 of the PDF, shown below)
These costs are financed in part by cutting wasteful spending to private insurers for Medicare "Advantage" plans and raising Medicare premiums on those making over $250,000 a year. Those revenues combine to give back the government $525 billion during that same period, thus *lowering* the deficit by $140 billion! On top of that, in the next decade, it is estimated to save far more!
When Dems passed the Affordable Care Act they used CBO scoring and raised some Medicare taxes on the rich to pay for the costs associated with expanding coverage. They pushed to allow drug prices to be negotiated. The bill lowers the deficit by over a hundred billion dollars in the first decade.
In short, if you believe that Democrats are the party who spends too much, or adds more to the deficit, you're simply living in a fantasy world. Facts are hard, cold and stubborn things.
Ed Brayton has an interesting view on this. He thinks that Republicans are able to get away with this bullshit for strategic reasons:
For all the Republican rhetoric about smaller government and "tax and spend liberals," the fact is that over the past 50 years the size of government has grown more under Republican presidents than under Democratic ones -- and so has the size of the debt because of their reluctance to raise taxes.Perhaps...
From 1962-2001, the average growth in total federal spending under Republican presidents has been 7.57%; under Democrats, 6.96%. Bush certainly did not help those averages any after 2001. During that same period, the average yearly deficit under Democrats was $36 billion; the average under Republicans was $190 billion. So under Republicans, spending grows more but revenues grow less because they always insist on tax cuts.
And that means taxes must go up at some point to pay the cost of the deficit spending plus the interest on that borrowing. I think part of the GOP strategy for the past 50 years (40 at least) has been to drive up the deficit intentionally by raising spending and cutting taxes, knowing that when the Democrats are in control they will have to raise taxes. Then they can say, "See, the Democrats are always raising your taxes!" -- but without acknowledging that it was made necessary by their own borrow and spend policies.
The fact is that neither party has any interest in actually reducing spending. The difference is that the Democrats are generally more willing to pay for it with taxes while the Republicans refuse to do so. And I think that is a deliberate strategy on their part.
Tom Toles is spot on:
