To the great surprise of nobody, another blue-ribbon panel of Washington’s A-list nabobs has failed at its task: In this case, it is the so-called supercommittee charged with nudging the federal government away from the edge of the debt abyss. Investors despaired at the news, and there was talk of a second downgrade of U.S. Treasury debt.
The failure of the supercommittee is a testament to Democrats’ tax obsession. With the supercommittee having fizzled, the next step is the automatic sequestration process, which imposes 50 percent of the cuts on a program that accounts for only 20 percent of spending (national defense) while leaving the entitlements largely untouched. But the country needs the Marines more than it needs Medicaid.
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The talks broke down because Democrats demanded $1 trillion in tax increases as the price of doing any deal that included entitlement savings — which is to say, as the price of doing any deal that begins to address the major drivers of spending going forward. Republicans have never quite owned up to being open to a tax increase, but that is what they are talking about when they talk about “pro-growth tax reform,” which includes broadening the tax base and eliminating some deductions and exemptions, producing a net tax increase even if tax rates stay the same or go down. But even that isn’t good enough for the Democrats, who insist that any tax increase be enacted through a relatively narrow range of options, mostly through raising tax rates on individuals with above-average incomes and on businesses that do not fall within the protective circle of Democrats’ political favoritism. (Don’t expect General Electric or the next Solyndra to start paying 35 percent, whatever else happens.) Because Republicans rightly declined to go along with this class-warfare program and insisted upon savings in entitlements, the supercommittee failed.
The sobering thing is that even the massive tax increases the Democrats wish to inflict upon the nation would not close the deficit that our entitlement programs will produce if left unreformed. A study by the International Monetary Fund estimates that, in order to keep entitlement spending at current levels while stabilizing the debt, every federal tax on the books — income tax, payroll taxes, excise taxes, etc. — would have to be raised by 88 percent. Democrats will be happy to run against entitlement reform, and they will wallpaper the airwaves with vulgar advertisements that show Paul Ryan running granny off a cliff in her wheelchair. But they are really running on an 88 percent tax hike — that or massive, unsustainable deficits.
Voters are beginning to understand as much, and that means that Republicans have a two-fold task ahead of them: The first is to overturn the automatic defense-spending cuts, locating savings elsewhere in the federal budget to offset them. Unlike most of what the federal government does, national defense is a real, pressing, national priority that is unquestionably a government responsibility. The range of threats facing the United States is broad and deep, and a single 9/11-scale attack could in financial terms alone cost the nation far more than we would save through defense cutbacks, to say nothing of the loss of life. Defense is one of the few federal functions in which budgetary concerns must perforce take a backseat to global political realities.
The same is not true of the entitlement programs, and so the second part of the Republicans’ task is to take that case to the voters in November. Most of the Republican presidential hopefuls have developed thoughtful, credible, long-term solutions to the financial imbalances of Social Security, Medicare, and Medicaid. The reforms they are proposing — means testing, gradually raising the retirement age, changing the indexing formulae — are far short of the radical changes that have been contemplated by some on the right. But properly executed they would bring the programs back into balance, a goal that is of critical importance as our population ages and the financial stress on the entitlements becomes more acute. Changing the terms of Social Security for a well-off 35-year-old decades away from collecting any benefits is not relegating granny to a cat-food diet, and Republicans should be willing to make that case.
Meanwhile, another opportunity to control spending and rationalize the tax code has come and gone. Our supply of such opportunities is not unlimited.
"Republicans have caused this failure of the Super Committee", the Left will say - which surprises no one but the Republicans in Congress.
The GOP Congress is just a Rube Goldberg experiment set up by the Democrats for their entertainment. How else can we explain the well established but complicated path our Representatives travel? The Dems know exactly how to arrange the series of triggers. All they need to do is periodically start the ball rolling to end up with increased spending passed and the GOP left Holding the bag with egg on their face.
Do we see an omnibus spending bill in the future?
What chance is there we will see a reduction to any of the 7 appropriation bills still floating around?
That we shall see the next CR pass by December 16, should surprise nobody - except for some of the Republicans who are voting to pass it!
Means testing and raising the retirement age should not be considered "reforms" to social security. These "reforms" simply mean that my already bad investment gets much worse. Reform is privatizing the system -- why can't Conservatives make this argument instead of simply letting the Government off the hook on yet another of their false promises.
It doesn't matter what Republicans do in the budget to offset military cuts. No budget will be passed while Harry Reid is Senate majority leader. The House has passed budgets before, and he won't even bring them up for a vote.
I am making plans for how to live without Social Security. I would be eligible under current rules in two more years, but sooner or later there will be a sheer inability to pay the amounts promised. I would rather any "share" I get went to fund the military.
My plans would work better if I became employed again soon, to increase my savings instead of spending it. Hopefully whoever is elected in 2012 will have some economic common sense.
Even if these politicians sincerely wanted to "do something" there is nothing they can do. $15 trillion in debt, many many times more in "unfunded liabilities." Millions of Americans on the dole and loving it. Two political parties, one wanting bigger welfare policies and the other too frightened to say no.
Why does anyone think a 30 year Treasury is a safe investment? Is there going to enough taxpayers then? Is there going to be a republic then? What is the wait on the downgrade? Guess it'll collapse overnight like the housing bubble, except the American bubble will be slightly more damaging. Buy a gun.
Does any one really believe that the Dems on the SC were negotiating in good faith? Their primary objective was to ensure the Defence cuts are required. And just who were the idiots that put these defence cuts, rather than entitlements, on the table in 1st place?
As a (relatively recently) retired Marine, I'll repeat this observation: when we repealed Don't Ask, Don't Tell we gave up on national security. Spend all the money you want. Equipment is wasted on bad people. You've created a culture that will break exactly at the moment it is most needed by killing unit cohesion. Congratulations, U.S. Dig deep.
relaxok, Do you think straights are bad people? Because we find gay behavior repugnant? Because by their own admission gays cannot control their sexuality, and therefore in a combat situation are straights wrong to think that gays will prefer their own "kind?" Even in peacetime we already had a sexual harassment problem, and that was with only 1/5th women. Now if I'm a serviceman and receive a lesser fitness report from my gay superior to that of another gay, what am I to think? What am I to think of certain looks, phrases? If I take up a sexual harassment claim, will it be listened to, suppressed, or will it be me who is prosecuted for "hate speech?" Gays can do whatever they want, I actually hired and promoted gay civil servants while I was a military officer. But I understood the difference between a 9-to-5 job and military service. You believe that heterosexuals, though we are clearly designed as such from DNA up, should be "educated" to deny their sexuality while homosexuality which is clearly averse to nature (evolution, etc.) is "fixed?" The bottom line is that you are asking heterosexuals to deny their sexuality and you are promoting homosexuality to be waved in their faces, and doing so with national defense on the line. Nice. I hope you or one of your loved ones are among the lab rats in this experiment when testing time comes. What size body bag should I order for you? That's where we should concentrate our defense spending under this Morally Superior Defense Force, meds for our wounded and body bags for the dead. Congratulations, oh superior one.
I'm utterly unimpressed by the "it's the Democrats' fault" approach here.
Because the last Congress refused to make appropriations for the current fiscal year past around February and also extended the Bush tax rates through 2012, House Republicans knew, when they took office in January 2011, about how much revenue the Government would receive through FY 2012 and for the first 1/3 or so of FY 2013. And they also knew that they had the power to control how much spending took place for about 2/3 of FY 2011 (February-September), all of FY 2012 and the first 1/3 (October-January) of FY 2013..
Regardless of the existence of a "supercommittee" or what it did, Republicans have therefore had plenary power to control the amount of money the Government borrowed from about February 2011 through January 2013.
They obviously could pass a bill that raised taxes (by an early repeal of all or part of the Bush-era tax cuts) and send that to the Senate. But they didn't do that.
So, if they didn't want to raise taxes, they could appropriate not one dime more for the period from February 2011 through January 2013 than they anticipate the Government would receive in revenue. They can't make the Senate pass a lower appropriations bill than the Senate wants and they can't make the President sign anything, but they can't be forced to appropriate one dime more than they want to.
In fact, even with respect to entitlement and other programs that don't require annual appropriations, House Republicans could have passed and sent to the Senate a bill lowering the amount these programs were authorized to spend as part of a bill that spent a bit more on non-entitlement programs - thereby giving the Senate the choice of: (a) deep cuts in non-entitlement programs along with the status-quo in entitlement programs; or (b)smaller cuts in non-entitlement programs combined with small cuts in entitlement programs.
And so far, they've appropriated almost as much since February 2011 as would have been appropriated if Nancy Pelosi was still Speaker of the House.
So, enough with the "it's the Democrats' fault" - because by their conduct the Republicans have chosen to share the blame.
And no - it's not an argument that the House passed a budget that proposed various cuts in spending (mostly way off in the future). A budget doesn't authorize spending and can be entirely ignored by Congress. Congress can pass 15 budgets and the President can't spend a dime - or Congress can appropriate 10 times that which was budgeted.
Let's assume for a moment that people believe what they've been saying in polls for years: that they expect to receive the benefits they've been promised. Thy also expect their children to receive the same benefits.
If Republicans run against the electorate, they can expect to be in the minority, watching Democrats deal with the problem of huge deficts and fast-growing debt. Given how badly the Democrats will do, they can expect to receive other chances, which can again be sacrificed by attacking entitlements.
Democrats are fairly confident they can succeed next year despite unemployment well over 8% and a recession that drags on. That's how important preserving entitlements has become. Republicans may not be as willfully ignorant as the editors, and that's their best hope. They do require a softening of views from their Presidential nominee, but that seems likely, too.
They most certainly did not fail at their task. You just have to figure out what their task was. Their task was to provide cover for congress while continuing to ignore the debt. Mission accomplished.
You'd have a difficult time persuading people that entitlement liabilities have anything to do with the unemployment rate. Especially given that medical care is one of the few sectors growing during the recession.
Medical care is a bubble, of course, and many people will be laid off when fee for service medicine ends. But as of now, unemployment is as low as 9% because of entitlements.
