Deficits ’R’ Us

Editorial

Published November 17, 2010, issue of November 26, 2010.
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The joint recommendations of a bipartisan commission led by Erskine Bowles and Alan Simpson and charged with balancing the federal budget included such incendiary ideas as raising the retirement age for Social Security and making its benefits more progressive.

That these ideas are politically difficult doesn’t mean they should be dismissed. On the contrary. The pronouncement by the still-Speaker of the House Nancy Pelosi that the recommendations are “simply unacceptable” is itself unacceptable. The simple fact is that federal deficits of the current size are unsustainable, and cannot be fully addressed unless serious changes to entitlement programs and calculated cuts in spending are part — not all, but part — of the solution.

Why are ballooning deficits so dangerous? As the bipartisan Concord Coalition has noted for years, “Growing commitments made by one generation to the next cannot be honored on empty pocketbooks.” Baby boomers have paid far less in taxes than they will draw in benefits, sticking their children and grandchildren with the bill and thereby raising the moral imperative for fiscal responsibility. There’s also a geopolitical reason. The massive deficits have left the federal government in debt to domestic lenders — sucking capital out of a hurting economy — and increasingly, to foreign lenders whose values and behaviors may be antithetical to our national interest.

The general rule of recent decades is that, counter to the assertions of some talk show hosts, deficits actually climb under Republican leadership in Washington and shrink or disappear when Democrats are in power. (Think the Clinton years versus George W. Bush’s administration.) As a Democrat, President Obama’s tenure so far has been the exception; for the worthwhile cause of avoiding a massive economic meltdown, the balance sheet became even more unbalanced. Now it’s time to bring it more in line.

Cliché though it sounds, it must be emphasized that this cannot and need not be done on the backs of the poor and struggling. The recommendations of Simpson and Bowles for strengthening Social Security would means-test it for the first time with a mix of tax increases and benefit cuts for wealthier seniors, while benefits would increase for retirees close to the poverty line. In the same vein, the cause of deficit reduction would be aided immensely by canceling the Bush-era tax cuts for the uber-wealthy, a move that all Democrats, including the one in the White House, should fight for and embrace.

Back in 1993, then-President Clinton agreed to appear at a conference on entitlements in return for the crucial support of a Pennsylvania congresswoman on a key budget vote. That vote, on a controversial but necessary tax increase, heralded an era of prosperity and balanced budgets. The conference broached the possibility of entitlement reform of the sort proposed by Bowles and Simpson, but unfortunately led to no further action. The congresswoman is now Clinton’s daughter’s mother-in-law, and the issue she quixotically championed has only grown more urgent.


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