Politics & Policy

Welfare Reform, Take Two

House Speaker Paul Ryan (Reuters photo: Joshua Roberts)
Paul Ryan is ‘working with the president on the entitlements that he wants to reform.’

Speaker Paul Ryan made an appearance on Ross Kaminsky’s radio program last week to make a pitch for the recent GOP tax plans. After the host brought up that the debt had roughly doubled under Bush and then again under Obama, Ryan signaled that he wanted to tackle entitlement reform in 2018.

Asked for specifics, the speaker made reference to welfare traps — in which the system punishes people for making more of their own money by taking their benefits away — but shied away when questioned about Trump’s opposition to Social Security and Medicare reform. Trump “has not shown much interest” in fixing those programs, Ryan noted, “so we’re working with the president on the entitlements that he wants to reform.” AshLee Strong, national press secretary for the speaker, tells NRO that Republicans “will set our goals [for] the upcoming year at our annual member retreat in January.”

To be fair, Ryan did emphasize the necessity of health-care reform for fiscal stability. In addition, Republicans cannot reform Social Security with a simple majority vote no matter what the president thinks (as that program is immune from the “reconciliation” process), and Ryan suggests he is having some influence on Trump when it comes to Medicare. But the caveat about “the entitlements that he wants to reform” is huge.

In the 2008 presidential election, Democrats and Republicans both spoke about the need to control entitlement spending; indeed, even Obamacare was meant “to bend the cost curve and start actually reducing health-care costs.” This had become a much less popular stance by the 2016 election, with both Clinton and Trump insisting that it was neither necessary nor desirable to tackle entitlements.

Now, with the GOP’s tax bill expected to reduce revenue by $1 trillion or so, the need to control spending is even more urgent. But the stance Trump took during the campaign has not changed. In “A New Foundation for American Greatness,” the Trump administration’s outline of its spending and budget priorities for 2018, “No Cuts to Social Security” and “No Cuts to Medicare” are explicitly stated.

What, then, are the entitlements that the Trump administration wants to reform? The proposal advocates $274 billion in welfare cuts, largely to the food-stamp program (SNAP), with smaller amounts from the earned-income tax credit and the child tax credit (achieved by limiting participation to those authorized to work in the U.S.). Reform is certainly necessary across the board, but in the case of SNAP, for instance, it is more an issue of implementation than of the letter of the law. And these programs are dwarfed in costs by those of the explicitly untouched Social Security and Medicare (which Senator Susan Collins, of Maine, claims to have secured against cuts in a deal with leadership).

The same document recommends an additional $469 billion in defense spending and (at least) $200 billion in “seed” infrastructure spending (to spur an additional $800 billion from state, local, and private sources), so any savings are quite immediately canceled out.

While perhaps the congressional GOP sees entitlement reform as its first priority after tax cuts, it does not look like the White House shares that view. The administration’s stated first task after a final tax bill passes is to propose details for the infrastructure plan. Even though Democrats spoke out against the administration’s original infrastructure proposals this summer, it’s possible they will work with the president and some Republicans on this.

There is not much to work as a counterweight against the unpopularity of entitlement reforms.

By contrast, entitlement reform is likely to generate opposition even within the GOP. If Republicans had included something like the Rubio-Lee measure to provide payroll-tax relief to working parents, they might have gained political capital by showing that they do care about the safety net. Given that the amendment failed and the rest of the bill is at least perceived as pro-corporate, there is not much to work as a counterweight against the unpopularity of entitlement reforms, even in the limited form that the administration envisions, where the biggest-ticket items are off the table and the cuts proposed elsewhere are relatively small.

While in theory congressional Republicans could include a Medicare overhaul in an entitlement-reform bill and force the president to consider a veto, it seems unlikely after the way the tax bills were shaped around the White House’s preferred corporate-income-tax rate. Then again, Trump changed his position on corporate income taxes immediately after the bill passed the Senate, so perhaps the same thing will happen with entitlement reform — and hopefully the spending boondoggles as well.

READ MORE:

Sustainable Tax Reform Requires Taming Entitlements

Entitlements: The Most Dangerous Addiction

Entitles Are Out of Control

— Jibran Khan is the Thomas L. Rhodes Journalism Fellow at the National Review Institute.

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