It’s not the entitlements, it’s the discretionary spending
posted at 1:01 pm on July 7, 2011 by J.E. Dyer
I’m going to make a statement many will find startling, and it has to be established with a bluntness that renders it incomplete, if we are to understand the issue.
Entitlements are not the problem for the federal debt in 2011.
Now, calm down. Entitlements are a debt problem. But they are not the reason the federal debt has increased 35% under Obama. I’ll say that again. Entitlements are not the reason the federal debt has increased 35% under Obama.
Obama has not added so dramatically to our national debt by putting new money into Social Security and Medicare. His multi-trillion-dollar deficit-fest has not pumped cash into Social Security and Medicare. Do I need to put this in three or four more ways in order to get the point across? Entitlements are a systemic, long-term debt problem, but they are not what has caused the national debt to spiral from 2009 to 2011.
It’s all the Obama spending on other things – not on the two user-contribution entitlement programs that America’s seniors now rely on – that has caused the debt to skyrocket. Ed puts it clearly in his excellent post today on the historic trends of revenue and spending:
Had spending increased at a rate of inflation from 2001 forward, we would probably not been in deficit at all. Had it stayed at the rate of inflation from 2006 forward, we’d probably be looking at historically average deficits in terms of GDP.
Those historically average deficits were bad enough, but in the context of historic trends in GDP, they warranted a deliberate, gradual approach to bringing them down, as opposed to stark panic. The legacy of four years of a Democratic Congress (2007-11), however, two of them under Barack Obama, is a discretionary spending spree that does induce panic (e.g., in David Brooks).
It’s the discretionary, non-military spending that has skyrocketed since 2006 (and especially since 2009), not the entitlement spending. Discretionary spending is where we have to wield the current-budget axe. I would never say the Defense Department should be immune to cuts, but we can’t take these cuts primarily out of defense. They have to come out of subsidy programs and regulatory agencies. For starters, they should come out of the new spending that dates only to 2009.
None of this means we shouldn’t address Medicare and Social Security as soon as possible. We should, and the Ryan plan for Medicare looks pretty good to me. But it is essential to keep our categories in order, and not let emotion and the Democrats’ incoherent political narrative pollute the debate.
Consider what has happened: Obama came into office with a Democratic Congress, and in two years this combination increased discretionary spending so much that the whole republic has been thrown into a panic about meeting our debt obligations.
But are we talking now about reducing discretionary spending, the variable that has changed the most since January 2009? No. We’re doing all our talking about everything else. Defaulting on debt payments, anger and dread about entitlement programs, raising tax rates, increasing revenue – we’re talking about everything except what has actually caused the proximate problem we face in 2011.
We have to stop falling for this. All the new spending added under Obama is only two years old. No one who has received money from it is a desperate senior with no other source of support. Huge portions of it have gone to keeping unionized government employees in their jobs, along with renewable-energy subsidies, a host of “green” (and other) development projects of dubious value, and increases in regulatory planning and administration. Some of the spending might be worth following through on (e.g., road improvements), but otherwise, it is this spending that ought to be eliminated first. The House Republicans have been right about that from day one: roll spending back to the level of 2008.
Instead, the president is reportedly approaching today’s budget conference with the posture that it’s time to make cuts to Social Security. This would be the second major signal in three days that Democrats are perfectly willing to cut entitlement programs – not reform them, just take whacks out of them – rather than forego tax increases and their favorite forms of discretionary spending.
Obama’s priorities – and the other Democrats’ – are clear. We could cut current discretionary spending, which has spiraled out of control since 2009, in order to meet our debt obligations after 2 August 2011. But they’re not willing to do that. They are proposing everything else instead: not just tax-rate increases, but cuts to Social Security and Medicare. Merely cutting those programs – without a scheme for phased-in reform – would have a terrible impact on today’s seniors. The point is not whether the Democrats would actually let such cuts take effect; the point is that their leaders are fully prepared to discuss them in public, rather than even consider rolling back Obama’s colossal increases in discretionary spending.
Don’t let this administration set up false alternatives, so that it can induce bad compromises with panic. The Republicans in Congress are doing the right thing, if not always in the exact way you or I would choose. Until Obama gets around to discussing the reduction of his monumental increases in discretionary spending, GOP legislators should hold the line.