The Corner

Former Obama Economic Advisers: We Need Entitlement Reform

Amid a bitter and highly partisan debate between the White House and House Republicans over a deal that would prevent the country from vaulting over the fiscal cliff, two former economic advisers to President Obama say that entitlement reform is essential to the long-term health of the economy. 

Former chairman of the president’s Council on Economic Advisers Austan Goolsbee tells National Review Online that any solution to America’s economic ills “cuts on discretionary and entitlement spending.” Goolsbee, who also supports revenue increases, stresses the strategic value of such reform in any potential bargain. Without entitlement reform, “there will be groups that say ‘I shouldn’t have to sacrifice because X other group didn’t give up anything,” he said in an e-mail. 

Former Office of Management and Budget director Peter Orszag is also speaking out in favor of reforming entitlements, and urging his fellow Democrats to do the same. “Democrats should affirmatively want entitlement reform that is progressive and puts the crucial programs on a sounder footing,” Orszag wrote in Bloomberg earlier this week. He challenged the Obama administration’s decision to put off such reform, asking, “Why would reform be easier in, say, 2014, when nothing is forcing action, than it is today?” 

The deal President Obama sent to House Republicans on Tuesday did not include structural reforms to entitlement programs. Throughout the week, the White House has stuck to its claim that their plan gleans “significant savings” from entitlement programs, and from health care in particular. But it leaves the fundamentals of Medicare, Medicaid, and Social Security untouched. The day after the White House laid out its proposal, the Washington Post asked, “Do Democrats Have a Plan for Cutting Entitlements?” 

Goolsbee, for his part, says he’s “pessimistic” that Obama and Boehner will reach an agreement before going over the cliff. He told CNBC last month that he believes there is “one last celebrity death match that’s lingering in there” between the two parties, and he’s standing by that statement.   

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