It’s been nearly a year since President Obama signed an executive order creating the National Commission on Fiscal Responsibility and Reform, or “deficit commission” as it was more commonly known, and almost two months since that commission issued its final report, which boasted a politically onerous cocktail of bold spending cuts, comprehensive tax reform, and — most important of all — sensible solutions for reforming bloated entitlement programs.
Tuesday night’s State of the Union address was an opportunity for the president to take up where the deficit commission left off. And while his nominal effort to freeze domestic spending for five years and his professed interest in reforming the tax code might have satisfied some, when it came to dealing with entitlements, Obama sent out the punting unit.
Obama acknowledged that federal spending on Medicare and Medicaid is “the single biggest contributor to our long-term deficit,” but he largely left it at that. He called for “a bipartisan solution to strengthen Social Security for future generations,” without any guidance as to what that solution might look like. That he listed reducing the deficit as merely the “final step” toward “winning the future” is a pretty clear indication of his priorities.
It was a serious blow to the efforts of Sens. Mike Crapo (R., Idaho), Tom Coburn (R., Okla.), Kent Conrad (D., S.D.), and Dick Durbin (D., Ill.) — all of whom served on the president’s commission and took on great political risk by voting to support its recommendations. Many believe that such reform is politically unfeasible without demonstrable leadership from the president.
Republicans certainly see it this way. “The president identified the appropriate issues,” Crapo says. “But there wasn’t a lot of substance. If he’s serious about the kind of fiscal restraint in all aspects of federal spending that he called for in his State of the Union address — if he can’t accept the commission’s report — he needs to start making detailed proposals for what he believes our action plan should be.”
Coburn, whose Washington Examiner op-ed Wednesday recalled President Obama’s vow that the deficit commission would not be “one of those Washington gimmicks that lets us pretend we solved a problem,” thinks the president came up short. “The best time to fix entitlements is when you have divided government,” he tells National Review Online. “But it looks like we’re not going forward under his leadership.”
Perhaps fittingly, the day after the president’s address, several alarming reports were released that illustrate just how divisive — and important — the upcoming debate over entitlement reform is going to be. The Congressional Budget Office (CBO) released its deficit projection for 2011: $1.5 trillion — nearly 10 percent of GDP — up from $1.3 trillion last year. The reports also contained long-expected but nonetheless jarring news about entitlement programs. For instance, Social Security will begin running annual deficits this year and continue to do so until its trust fund (which has, in reality, already been “borrowed” by the federal government to fund other programs) is completely gone, which will happen in about 2037. The CBO estimated that Medicare payments alone, which are expected to grow by 10 percent this year, would almost double the deficit over the coming decade if reimbursement levels continue at their current rates, due to the influx of Baby Boomers reaching retirement age.
Meanwhile, according to a Gallup poll conducted January 14–16, 66 percent of Americans — regardless of party affiliation — oppose cutting Social Security. In regard to Medicare, 60 percent of Republicans and 64 percent of Democrats oppose cuts. (Of course, their story changes when specific programs aren’t on the chopping block: Other polls show that most Americans believe debt levels are “dangerously out of control” and want the deficit brought down.)
Senator Conrad, who chairs the Senate Budget Committee, told reporters on Wednesday that the CBO numbers should be “another wakeup to all of us” regarding the severity and urgency of the deficit problem. Lawmakers have to muster the will — whatever the polls say — to avoid an economic catastrophe. “We need to act and we need to act this year,” he said. “Frankly, [we’re] going to have to deal with entitlements.”
He also suggested that Obama wasn’t pulling his weight in the debate. “I would have liked very much if the president would have spent a bit more time helping the American people understand how really big this problem is,” Conrad said. “There has got to be leadership to help persuade the American people that this problem is so big you’ve got to deal with all [aspects of the budget, including entitlements]. Nothing can be sacrosanct. Nothing can be excluded.”
Only Senator Durbin — probably the most surprising vote in favor of the deficit-commission’s report — took a softer approach. Asked if he thought the president needed to be the first to “dive into the pool” on entitlement reform, Durbin said: “I think he did; I think he got wet last night.”
Durbin said he was encouraged by the ongoing discussions with Senators Conrad, Crapo, and Coburn, and hopeful that solutions were in the offing. The other senators echoed this sentiment. Conrad reiterated his call for a bipartisan summit between the White House and members of the House and Senate to begin work on a long-term plan to implement sometime this year.
Crapo tells National Review Online that there is growing support within the Senate — on both sides of the aisle — for meaningful entitlement reform, and hopes to have some sort of legislative vehicle ready soon that would lay out some general parameters. “I believe we are at the point where we need to force a vote in Congress,” he says. A number of senators — Saxby Chambliss (R., Ga.) and Mark Warner (D., Va.), for example — have already begun efforts to do just that, with or without the president’s leadership.
Senator Coburn says he’s willing to proceed no matter who supports him. “I don’t mind going by myself,” he tells us. But that doesn’t mean he wouldn’t like to see some guidance from Obama.
A political cynic might suggest that Obama’s logic runs this way: Sitting out a belligerent debate over entitlement reform might not be such a bad move for a first-term president angling for reelection, the deficit be damned. Indeed, “progressive” senators Bernie Sanders (I., Vt.) and Sheldon Whitehouse (D., R.I.) held a conference call before the president’s speech simply to praise the fact that he would not be endorsing any of the deficit commission’s recommendations on Social Security. And one can imagine how Obama’s liberal base feels about the issue.
Or maybe he just doesn’t grasp the seriousness of the crisis we face? That’s unlikely. “I think he understands the problem,” Coburn says. “They made a political calculation that they can’t take that risk.”
— Andrew Stiles is a 2011 Franklin Fellow.