Politics & Policy

Obama’s Entitlement Promises

With a little over a year left in his first term, how are they holding up?

‘We’re going to have to take on entitlements, and I think we’ve got to do it quickly. We’re going to have a lot of work to do, so I can’t guarantee that we’re going to do it in the next two years, but I’d like to do it in my first term as president.”

That was candidate Barack Obama back in October of 2008, responding to a question from Tom Brokaw about how soon Obama would, if elected, move to reform entitlement programs, which Brokaw described as “a big ticking time bomb that will eat us up maybe even more than the mortgage crisis.” (Funny how this sense of urgency has all but evaporated in the mainstream media.)

So, with a little over a year left in Obama’s first term, how’s it going? One need look no further than the Standard and Poor’s report explaining its decision to downgrade the United States’ credit rating. The ratings agency describes the recent debt-ceiling deal approved by Congress as insufficient because “the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.” Which is basically a polite way of saying “big ticking time bomb.”

Throughout the debt-ceiling debate, Obama insisted that he was willing to “put everything on the table” and “get serious” about entitlement spending, and claimed to have offered $650 billion in savings over ten years. He’s talked vaguely about raising the retirement age and mean-testing benefits. But all this would have been more convincing, however, if he had bothered to put forward a plan in writing. House Speaker John Boehner (R., Ohio) cited the fact that Obama was “adamant that we cannot make fundamental changes to our entitlement programs” as a primary reason for his decision to abandon “grand bargain” talks with the White House.

Apparently, Obama still isn’t willing to make the needed changes, at least judging from his remarks on August 8 to address the S&P downgrade. “I intend to present my own recommendations over the coming weeks on how we should proceed,” the president assured us. It will include two major items: 1) tax increases, and 2) “modest adjustments to health-care programs like Medicare.” S&P downgraded the U.S. because all Washington made were “minor changes” during the debt-ceiling debate; apparently, Obama thinks “moderate adjustments” will get us back on track.

It’s not as if Obama hasn’t talked a serious game on entitlements before. In an unusually candid press conference on July 11, the president appeared to scold congressional Democrats for their unwillingness to confront entitlement spending. “The vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements; would prefer, frankly, not to have to do anything on some of these debt and deficit problems,” he said. “And what I’ve tried to explain to them is, number one, if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”

Indeed, many Democrats like to argue that they have already gone a long way toward saving our entitlement problem by passing Obamacare, which includes about $500 billion in Medicare “savings.” But this claim is patently belied by the most recent Medicare trustees report, which predicts that the Medicare trust fund will run out of money in 2024, five years earlier than forecasted in last year’s report. Not only that, but the revised forecast is based on a number of “implausible expectation[s],” in the words of Medicare chief actuary Richard Foster, many of them enshrined in the new health-care law. Medicare “as we know it,” the trustees confirm, will end unless dramatic reforms are enacted to bring down costs.

At the very least, Obama has displayed a token understanding of the reality of the situation. He has even attempted to frame the entitlements discussion in a way that could potentially appeal to the Left. “If you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid, and believes that it is part of what makes our country great that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term,” he said in July. “And if you’re a progressive that cares about investments in Head Start and student-loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order.”

Whether this argument will fly with members of his own party remains to be seen. Sen. Chuck Schumer (D., N.Y.) seems intent on running a purely cynical “Mediscare” campaign against Republicans in 2012. House minority leader Nancy Pelosi (D., Calif.) proclaimed in May that “we have a plan. It’s called Medicare.” But if, as he claims, Obama has all along been advocating for substantive entitlement savings behind the scenes, it would be irresponsible not to bring that case to the public. It may be too late to avoid a credit downgrade, but the least Obama can do now is prove that his response to Brokaw’s question in 2008 wasn’t just another empty promise. 

— Andrew Stiles is a 2011 Franklin Fellow.

Andrew StilesAndrew Stiles is a political reporter for National Review Online. He previously worked at the Washington Free Beacon, and was an intern at The Hill newspaper. Stiles is a 2009 ...


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