Both Doug and Rich, below, make a crucial point: that the important debate about funding for the rest of the current year—a debate made necessary by the failure of the last congress to produce a budget—pales in scope and significance compared to the coming 2012 budget debate, which will begin as soon as next week.
The argument now raging about billions of dollars over the rest of this year matters a lot, but the debate soon to begin about trillions of dollars over the coming decades is by far the most important policy challenge this congress will confront. Republicans now seem poised to make pretty significant progress on the former—more or less achieving their original goal of reverting to 2008 levels for the remainder of the year—and then to press for far far greater progress on the latter.
Apparently the House Budget Committee will take up the 2012 budget next week, and if the early leaks and reports are to be believed, the budget Republicans will propose will not only involve dramatic cuts in discretionary spending and reforms of the budget process to cap future spending but also exceptionally ambitious structural reforms of our entitlement system—the kind of reforms that can actually help us avert a debt crisis that otherwise seems nearly inevitable while allowing the economy to grow. House Republicans seem willing to lead where the president chose to punt.
This article in
The Hill today offers some early details about the Ryan budget. It suggests that Republicans will call the Democrats’ bluff on entitlement reform, making use of the strange posture that Harry Reid and other Democrats have adopted by which they deem Social Security (which for all its troubles is the least troubled of our major entitlements) off limits while remaining silent on the collapsing health-care entitlements. The Ryan budget, if this report is accurate, will require the president to propose Social Security reforms but will itself propose detailed and profound reforms of Medicaid and Medicare. The federal share of Medicaid would be transformed into a block grant to the states—giving the states more freedom to design their programs while saving the taxpayer hundreds of billions of dollars. In Medicare, meanwhile, they would leave the benefits of those now retired and nearly retired as they are but for younger people would transform Medicare into a defined contribution program which, rather than directly paying for services in an open-ended way, would give each senior a set sum of money to purchase private health insurance of his choice. Such a reform would not only offer immense savings directly and give seniors more options, it would also introduce far greater efficiency among providers that would help contain costs in our larger health-care system. And by leaving today’s seniors and near-retirees as they are, this approach could neutralize the foremost source of opposition to entitlement reforms.
If this report is true and the Ryan budget includes these kinds of reforms while repealing Obamacare, sharply curtailing domestic-discretionary spending, and introducing real spending caps, it would be by far the boldest and most ambitious conservative budget we have seen emerge from any congress. The Hill quotes freshman Republican David Schweikert on the significance of such a budget:
Schweikert told The Hill Wednesday that for him and other freshmen, the Ryan budget is much more important than the current fight over 2011 spending. “That document is everything,” he said.
That seems about right. A budget like that would show that Republicans understand what the 2010 election was really about, and it would form the foundations of the conservative policy agenda for 2012 and beyond. Let’s hope the rumors are true.
Hallelujah!
Finally some people in Washington are starting to understand where the real battles lie. If this budget has in it what the post says it does, we may not have a budget until 2013, when one side or the other has it's president in office with a working majority to get things done.
This is where the Tea Party has to use it's money, volunteers, and everything at its disposal to support the House majority. Anything else is a distraction that will doom their chances to get what they, and we, all want. A small, effective, and good government living within its means.
Reply to this commentLinkReport AbuseIt is unfortunate that meaningful reform of Social Security needs to be downplayed due to political considerations. However, Medicaid and Medicare reform will have a much greater impact on the country's economic health in both the short and long term. Regarding Social Security being solvent through 2037, I believe that is correct in terms of how the accounting is done, but in reality, that claim is a farce; it is solvent in that there are basically IOU's in the account, IOU's that will have to be paid out of future tax revenues. Of course, if there is a shortfall in revenue, then some combination of the following would be required: increase revenue by raising taxes, reduce expenditures in other areas, decrease benefits or borrow more money. I believe that Veronica de Rugy has recently posted information that deals with the 'myth' of Social Security being solvent through 2037.
Reply to this commentLinkReport Abusesawdin: If the economy stays bad, and people keep retiring early at the rate they have been for the last 2 to 3 years, there's no way SS stays solvent until 2037, even using the govts accounting method.
Reply to this commentLinkReport AbuseThe Republicans have no concept of what it means to win. They want credit for playing the game. In tennis we call this pushing. And there are many pushers, either because of ability or temperament or both. These sort of players can be #1 in overall rankings, but in the end never win the slams. I won't name such players in the current standings as it serves no purpose. Yet our leaders want credit for reducing what amounts to an unmeasurable amount as a percentage of the total budget. This is a non starter if the goal is to get a grasp on the budget. Couple that fact with the situation that we have to do it with the most liberal set of ideologues we have seen in decades, "waiting" to attack this "issue" until fall is laughable. We clearly do not have the man/woman power to win this skirmish. How can we possibly kid ourselves that we have the will to wear down the likes of Reid, Schumer, Pelosi, Durbin, Hoyer, ad nauseum.... Again, in tennis, the players who end up winning generally come out and "send a message" within the first few minutes of the first game. Our message from the House leader was: "Oh don't worry, we won't shut down the government!!!" What a ridiculous tactical, and ultimately, strategic move.
In short, we should be going after their jugulars. We should be politically strangling the opposition...right now. Not waiting to REALLY bring it in the fall. With that sort of an attitude, we will end up like the Alamo: a lot of men get killed and we lose the battle. In that case, however, the Alamo was filled with heroes. Our house makeup is still in question.
Reply to this commentLinkReport AbuseThanks, Yuval, for a really important post. I am baffled about why some people seem to want to have a fight to the death about virtually pennies when the fight that begins in a week or so is literally about all the marbles. We simply must make the right choice between emotional satisfaction and pragmatic, skillful pursuit of vital policy objectives because our whole future rests on winning this second battle.
Reply to this commentLinkReport Abuseif ryan comes out of this smelling pretty, it could slingshot into a presidential nomination.
Reply to this commentLinkReport AbuseYou know, I'm surprised that the Dems don't completely give in to the GOP on the $61B, and then when the REAL work begins for the 2012 budget, they can trot out what they gave up as proof that they are real budget cutters, but that Paul Ryan's budget is too "extreme" for the country.
Reply to this commentLinkReport AbuseIf the current mewling and caterwauling is any indication, you can expect a crescendo chorus come 2012.
There is no reason - short of divine intervention - that the arrogant players will suddenly become reasonable a year from now.
Reply to this commentLinkReport AbuseThe entitlement issue can deny Republicans majorities and the Presidency for the next generation. Or resentment might be mild enough to be overcome.
An acceptable solution - meaning one producing tolerable losses of votes - to Medicare would of course require that all commitments to those born before, say, 1965 be kept without question or change. Any reduction in expenses must come from providers, though without affecting continuity of care.
People born after the cut-off date expect Social Security and Medicare to disappear without benefit to them, so they are likely willing to settle for little in the potential generational war. They might consider what they receive a slower fade-out than they expected.
This is not the best time for Republicans to take risks. They have one House in Congress. Democrats can prevent anything from happening, leaving statements about damage unanswerable, and take from Republicans the title Protector of Programs for the Elderly.
Given the impact of Obamacare with its reductions in Medicare spending, you'd think Republicans wouldn't be anxious to be on the wrong side of the issue that elected many of them. But apparently not.
The best thing Republicans could do is to increase worry about the programs. Democrats seem to ignore future budgets when discussing popular or (as they see it) eventually popular programs. The suggestions Republicans provide would be insufficient in total dollars, but not lose many votes. Then they can campaign on finishing the job with a trusting populace.
Yes, the budget plan is vital, but more for how it might be harmful rather than any good that might be done.
Reply to this commentLinkReport AbuseMarkW
Read Krauthammer's recent story on ss. It's not solvent now.
Reply to this commentLinkReport AbuseThings seems to be moving.... slowly.... in the right direction. My one wish would be for people to stop dismissing a Billion dollars as chump change. Politicians who deride 20 Billion as only a fraction of the total debt are correct, but seem to forget what an astronomical amount of money a billion dollars is. And the kicker? Its Not Their Money!!!
Reply to this commentLinkReport Abuse@Chris Clark
I agree that a billion dollars is a large sum of money, too bad the very day they passed the CR cutting $6 billion the government created $78 Billion in new debt. Thinking in those terms, the entire amount they will cut from the 2011 budget was already exceeded that very day.
This is how we can all so easily say in 2011 that in 2020 our debt will be at least $26 trillion. Why is that? You would think we could actually reduce the $14 trillion by a penny in 9 years, but instead we all agree we will add another $12 trillion in new debt in the next 9 years.
Now maybe I am the idiot here, but why would I support people that accepted this reality? I support people that want serious cuts, like Rand Paul, Michele Bachmann, Paul Ryan, Chris Crisstie etc. Those old school Republicans that helped get us into this mess, can't wait for them to go. Democrats on the other hand, I am at a point where I would not even want to be a friend of a Democrat if they told me they voted for one. I mean that.
Reply to this commentLinkReport AbuseKeep your eye on Paul Ryan as that fresh face, addressing our number one national problem with courage and creativity,from the swing state of Wisconsin. He can defend his position with great clarity, and when he is finished doing his crucial work at Budget he could be the guy for 2012
Reply to this commentLinkReport AbuseIf the Republican leadership was this wobbly when fighting over billions, what makes anyone think they will develop steel spines when it comes to fighting over trillions?
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