Opinion

The Great Debate

America is not broke

“We’re broke.” House Speaker John Boehner (R-Ohio) and Tea Party groups have repeated that phrase so frequently that it must be true, right?

But America is not broke. Our short-term budget outlook is stable, and our long-term challenges are manageable if both sides are willing to compromise. So why would politicians falsely claim that we’re broke? To justify radical changes to our nation’s social contract that Americans would never accept any other way.

This may be surprising, given how much we hear about a looming “debt crisis.” But annual budget deficits have fallen by almost two-thirds over the past five years. The total national debt is actually projected to shrink in each of the next three years as a share of the economy.

Exaggerating our debt does not advance smart fiscal policies. It does, however, undermine the social programs created by the New Deal and the Great Society by making their successes appear hopelessly unaffordable and doomed to failure.

If our debt is out of control, then Social Security, Medicare and Medicaid would seem like unrealistic pipedreams. Feeding the hungry, rebuilding our infrastructure and educating our children would sound like nice ideas, but too much for the government to handle.

from Reihan Salam:

The ‘grand compromise’ that wasn’t

One of President Obama’s defining convictions is that he is the most reasonable man in our nation’s capitol. He seems to view opposition to his agenda as a reflection of intellectual or moral failures (my opponents don’t understand the underlying issues well enough, or their hearts aren’t big enough), or as a product of naked cynicism (my opponents are dishonest, and they will do anything to defeat me). To prove his point, the president will occasionally tout an idea from the other side of the aisle, or rather an idea he imagines to be from the other side of the aisle. And when his political opponents don’t embrace the idea, well, that means that they are acting in bad faith.

So I was delighted by the news that the Obama administration is changing its tune on Social Security in its forthcoming budget proposal. Last year, the president included a Social Security reform compromise in the budget proposal he presented to Congress. This year he has decided not to do so. But the truth is that the president’s Social Security compromise wasn’t a compromise at all. His decision to jettison it is a refreshing change of pace. And while the reforms aren’t officially part of the 2015 budget proposal, they remain relevant because Obama is treating them as a concession he’ll make if Republicans agree to raise taxes.

According to the president and his allies, the White House was only willing to compromise on Social Security, by cutting benefits, if Republicans were willing to give a little too, by agreeing to higher taxes. The problem is that his idea for cutting Social Security benefits is actually pretty bad, and it would also raise taxes. In other words, the president’s offer to the GOP is, “Hey, why don’t you share the blame for this thing that will make Social Security worse for seniors and raise taxes, and in return for my generosity you’ll let me raise taxes even more?” You will be shocked to learn that Republican lawmakers were not thrilled by this idea.

What about Social Security’s rollout?

After the nation’s major social program finally became law, critics regularly blamed it for a slowing economy and a swelling federal bureaucracy. Fierce congressional opposition led to the formation of a blue-ribbon panel to overhaul the measure. Obamacare in 2013? Not quite. It was Social Security in 1937.

Meanwhile, after enrollment began for the far-reaching health insurance initiative, administrators wrestled with myriad, unexpected problems. Implementation, according to the man who oversaw the introduction of Medicare in 1965, “took the form of a whole year of consultation with literally hundreds of people in identified areas of concern.”

The tortuous, often controversial implementation of both Medicare and Social Security serves as an early template for the current controversies over the Obamacare rollout. The ultimate success of those social programs ought to calm the overheated atmosphere surrounding the first days of enrollment for the Affordable Care Act.

To help end budget gimmicks, pass this bill

When it comes to addressing our growing national debt, there is no shortage of disagreement between the political parties in Washington. But there is one thing they should both agree on: to tell the truth about our nation’s growing fiscal imbalance.

That’s hardly the case today. Fiscal reporting by the federal government — whether through the Congressional Budget Office or the Office of Management and Budget — vastly underestimates the size of the problem we face and the inter-generational consequences of remaining on our current path.

For example, trillions of dollars in unfunded promises to current and future retirees through programs like Social Security and Medicare are not captured in either the reporting of this year’s deficit or our total national debt. In addition, cost projections on pending legislation only look 10 years into the future — hardly far enough to gauge their long-term budgetary impact.

Obama’s budget bid for a ‘grand bargain’

President Barack Obama’s budget, released Wednesday, is getting a lot of criticism from ideologues on the right and left. That is one of the most encouraging things about it.

Though the president’s budget falls short in several important ways, it demonstrates his willingness to compromise — something most Democratic and Republican legislators have resisted. Now comes the critical stage in any real effort to achieve a “grand bargain,” when the president can show true leadership by bridging the divide between the parties and using the bully pulpit to address the American people in a constructive fashion that can lead to a deal.

The most helpful thing about the Obama budget is that, for the first time, the president has publicly proposed reforms to two key social insurance programs. By adopting a GOP-backed change in the inflation calculator — the so-called chained CPI — the president is accepting adjustments in the cost of living payments for those receiving Social Security.

The price of defying your base

Defying your base is always risky. It can either bring you down — or it can make you look stronger.

Right now, politicians in both parties are trying to pull it off.  Senator Marco Rubio (R-Fla.) – a likely contender for the 2016 Republican nomination – is preparing to challenge conservatives on immigration reform. President Barack Obama is defying liberals on entitlement reform. What are they thinking?

Your base is people who are with you when you’re wrong.  Sooner or later, every politician gets in trouble. He needs people to stick up for him — people who say, “He was there for us and we’ll be there for him.” President Ronald Reagan’s base, for example, stuck with him during the Iran-contra scandal. So did President Bill Clinton’s base during impeachment.

Social Security as solution, not problem

Social Security is not the problem – it is the solution.

Washington is filled with talk of a looming “retirement crisis.” The discussion focuses on funding Social Security and usually includes calls to cut benefits – either by changing payout formulas or raising the retirement age.

But the real problem is not the long-term solvency of Social Security. Rather, it is the fact that millions of Americans are facing an insecure and underfunded retirement.

The best way to address this retirement issue would not be to cut Social Security but to expand it, as Michael Lind, Steven Hill, Robert Hiltonsmith and I argue in a new paper released Wednesday. By increasing the public portion of the American retirement system, we can spend the same or less on retirement as a share of the economy while making the system as a whole much more progressive and stable.

2014: The Democrats’ dilemma

Washington has been fascinated by Republican self-laceration since the 2012 election. Karl Rove triggered a circular firing squad by vowing to take out unwashed challengers in GOP primaries. Louisiana Governor Bobby Jindal begged Republicans to stop being the “stupid party.” Strategists say the party can’t survive as stale, pale and male. Tea Party legislators knee-cap GOP congressional “leaders” and well-funded political PACs strafe any who dare deviate from the party’s unpopular gospel. Republicans are even talking about changing “Grand Old Party” to something more fashionable.

Representative Paul Ryan’s newest budget will put every Republican on record voting to turn Medicare into a voucher, gut Medicaid, repeal Obamacare, savage investment in education and leave some 50 million Americans without health insurance. Not surprisingly, polls suggest Congress is less popular than colonoscopies, and Republicans poll at lowest levels on record.

The re-engaged president is pressing reforms on immigration, gun violence, gay marriage and climate change. These issues help consolidate his majority – the “rising American electorate” of young voters, minorities and single women.

The fight for a grand bargain

The Gang of Eight: (Top Row, L to R) Senator Mark Warner (D-Va.), Senator Saxby Chambliss (R-Ga.), Senator Tom Coburn (R-Okla.) Senator Kent Conrad (D-N.D.) (Second Row, L to R)) Senator Mike Johanns (R-Neb.), Senator Mike Crapo (R-Idaho), Senator Dick Durbin (D-Ill.), Senator Michael Bennet (D-Colo.)  REUTERS/File

There is growing momentum in Washington and around the country in the fight to restore fiscal sanity. So get ready for the counter-attack by the special interests and ideologues.

A growing number of Republicans have now stood up to Grover Norquist’s organization, Americans for Tax Reform, and disavowed the pledge they signed to not raise taxes. We should all commend legislators like Senator Saxby Chambliss (R-Ga.), Senator Lindsay Graham (R-S.C.) and Representative Peter King (R-N.Y.), who have recently joined in refusing to put ATR’s pledge ahead of the nation’s interests.

A mandate to help the middle class

The focus in Washington has now shifted to the fiscal cliff, with the White House and Congress, particularly the House Republicans, staking out negotiating positions on the expiring Bush tax cuts and the looming budget sequester.

The White House’s firm opening salvo—and House Speaker John Boehner’s grudging admission that he is “open” to a budget deal that contains new revenue—have been much discussed. With six in 10 Americans expressing support for higher taxes in exit polls on Nov. 6, President Barack Obama’s position is a strong one.

It’s important to remember, however, that the public came out on Election Day in support of more than Obama’s tax stance. Exit polls and public-opinion surveys show that the president’s mandate goes far beyond taxes and the fiscal cliff.

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