Deficit Reduction? Well Yes, But Maybe No.

The Wall Street Journal has written a story about the subject garnering a lot of press these days, the deficit. And there are plenty of stories that run directly off the question of how to deal with the deficit, principally the future of Social Security and Medicare and Medicaid. The Journal put a focus group together in Richmond, Virginia, with many constituents of House Minority Whip Eric Cantor part of the group. And while the Journal story posits that the electorate was ahead of the politicians in being willing to accept some tough medicine to tackle the deficit, it just does not appear to be entirely true. I have attached the results of the recent WSJ/NBC News survey dealing with those questions below. I think it would be safe to say that everyone is in favor of cutting the deficit, but few are in favor of the real steps that are needed to actually reduce the deficit.

“It’s a brutal predicament for politicians because the rhetoric of deficit cutting is enormously popular, but the details are incredibly unpopular,” said Matt Bennett, a vice president at the Democratic group Third Way, which has polled extensively on the issue.

And that brutal predicament has led politicians to issue tough statements about combating the deficit, while refusing to say how.

But the leadership of both parties have steadfastly resisted offering solutions. Mr. Cantor, who would likely become House majority leader if his party wins back control, pointed to the experience of his colleague, Rep. Paul Ryan (R., Wis.). Mr. Ryan’s detailed “road map” to a balanced budget has been attacked by Democrats who have tried to tie his proposals, such as a voucher system for Medicare, to the GOP leadership.

Mr. Cantor acknowledged a hunger for straight talk on the deficit. But he added, “We have to embark on an incremental approach to rebuild confidence, so we can live up to what people want.”

Cantor’s call for incremental change and refusal to offer specifics takes the cloak away from Republican hypocrisy over the issue. But Democrats at this point in time are in the same boat, and truly on the defensive on the issue because of the stimulus spending. Cantor’s incremental approach is laughable when you look at the scope of the problem.

Even among such diverse voices, the nation’s fiscal problems were a central concern. At $1.47 trillion, the federal deficit this fiscal year exceeds all defense and nondefense spending at Congress’s discretion by $110 million. In other words, lawmakers could eliminate the entire military, all federal education, agricultural, housing programs, federal prisons, the Central Intelligence Agency, Federal Bureau of Investigations, Coast Guard and border patrol, and the nation would still be in the red.

Shocking numbers, and yet even long term solutions seem to be off the table. And the left is girding up for a battle over Social Security, with groups forming to fight any potential changes to the system that might come out of the President’s Deficit Commission.

Many liberals are particularly opposed to any plan that would link cuts in Social Security to deficit reduction. They say that because the retirement program has long run a surplus, it is not to blame for the budget deficit. The commission’s mandate is to examine ways to balance the budget and to address the growth of entitlement programs.

Outside the commission, Moveon.org, the Campaign for America’s Future and other liberal groups are pressuring candidates for Congress to promise not to support benefit cuts, posting name-by-name results on a website. A coalition of 125 groups, called Strengthen Social Security, calls for closing the shortfall with tax increases alone.

Yes it has run a surplus, and in the combined budget reporting that surplus has been used to mask the real size of the federal operating deficit. Additionally the surplus has been spent and the cash replaced by government bonds. And with the system on track to go negative by 2016 (maybe earlier) those bonds will now have to be redeemed, which will create another huge strain on the operating budget. Yes sir that Al Gore lockbox certainly does look more attractive today. With courage in short supply in Washington on both sides of the aisle I don’t expect much by way of corrective action to solve the structural deficit. And I think that bodes very badly for the country, and for our standard of living.

Read the WSJ story on the Richmond focus group here.

Read the WSJ story on the potential for Social Security changes here.

wsjnbcpoll-partial-08122010

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4 Responses to Deficit Reduction? Well Yes, But Maybe No.

  1. Jules Gordon says:

    Your Honor,

    I’m impressed, that observation was almost “fair and balanced”.

    The players:
    1. The Public who want their “free” benefits and will vote against anyone who denies or tries to take them away.

    2. The Democrats, who give away benefits, with other people money, even when there is none to be had. The expected reward are “votes”

    3. The Republicans. When the last president suggested a partial fix to by
    ‘privatize” Social Security the democrats, such as your self, excoriated him. How does one begin dialog with that reaction?

    The Republicans haven’t the courage to advance their ideology small Government, low taxes etc. In fact, during the last administration they acted like Democrat light and paid the price.

    4. The political class that has created healthcare and retirement benefits for themselves and corrupts its constituency to achieve. There is no length they will go to keep their office.

    I reiterated, social security will NEVER be able to carry and individual through retirement. Medicare/Medicare are unsustainable.

    How do you overcome these roadblocks?

    Jules

    Like

  2. Jules Gordon says:

    You Honor,

    Here’s another view by the Heritage Foundation.

    The debate about whether Social Security needs to be fixed is over. The 2010 Social Security Trustees Report, released on August 5, shows that the program will run cash-flow deficits in both 2010 and 2011 due to the effects of the recession. Then in 2015, Social Security will begin to inflict massive permanent annual deficits on American taxpayers. And Social Security is just one of the Big Three entitlements (Social Security, Medicare and Medicaid) that is set to bankrupt our country. Unless major reforms are made, spending on just these three programs alone will consume all federal government revenues by 2052. According to the International Monetary Fund, over the next 20 years the United States will experience the second highest projected increase of all the G20 countries in health care and pension spending as a share of GDP.

    We are in the toilet and Obama doesn’t care.

    Blame Bush Entry Here._______________

    Jules

    Like

  3. Bill Manzi says:

    Jules,

    We are in agreement on the severity of the numbers. On SS and Medicare I do not blame George W. Bush, but rather blame all Presidents (and the Congress) for 30 years of mismanagement. I am still astounded by educated folk saying that Social Security has enough surplus to last till 2037. How do you pay for the trillion dollar plus in bonds that replaced the cash? All involved want to punt. I saw Mitch McConnell on Meet the Press, and he punted on the Paul Ryan Roadmap question as well as the overall deficit, deferring to the Presidential Deficit Commission, which he voted against. Problem is that even in good times the Country does not want to stop deficit spending. I think you are wrong about Obama not caring. But real policy changes need to be made, and nobody save a few has the guts to step forward.

    Bill

    Like

  4. Jules Gordon says:

    Your Honor,

    On that we agree.

    Jules

    Like

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