The Hot Potato
When the dust clears, the recently realized sequestration maneuver will succeed to do at least one thing: to show Americans that our budget crisis cannot be solved without addressing entitlement spending. As of the spending cuts that were officially triggered this past weekend, the United States has at least started the grueling process of balancing its budget after decades of decadence, indulgence, mismanagement, and shortsightedness. Ultimately, this process has been an act of delaying to address the cornerstone of our budget woes—entitlement spending.
There is some good news. Taxes have at least started to go back up—the New Year’s compromise this winter saw payroll tax breaks end and taxes go up for the wealthiest Americans culminating in $600 billion dollars in new projected revenues over the next ten years. As of the sequestration and the failure to reach a budget compromise before March 1, this past Friday, $500 billion dollars of defense spending cuts and $500 of non-defense discretionary spending cuts were enacted to be phased in over the coming decade.
Do not, however, let these large numbers lead you to the belief that our budget problems are anywhere near solved. The Congressional Budget Office projected in 2011 a ten-year budget shortfall of $13 trillion dollars—that is, $13 trillion dollars will be added to the United States’ public debt between 2011 and 2021. In this light, the budget changes so far enacted accomplish merely a fraction of what must be done.
What must ultimately be done to deal with out budget woes? What is the one aspect of our deficit that everyone in Washington knows to be the problem? The one answer to this question is the entitlement programs of Social Security, Medicare, and Medicaid.
Of the roughly $47 trillion dollars that the Congressional Budget Office predicted the United States will spend between 2013 and 2024, approximately $24 trillion dollars, over 50%, of that will be spent on these entitlement programs.
More savings need to be carved out of the bloated Pentagon budget, taxes need to rise dramatically for many Americans, specifically the top earners, and certain discretionary spending programs will need to be curtailed. Efforts to balance the budget through these avenues alone however will ultimately prove illusory if entitlements go untouched. Petty squabbles over Planned Parenthood, foreign aid, and food stamps are so insignificant in terms of actual dollars and cents that it is laughable when they are claimed to be “draining our budget.” Likewise, taxes must go up for the country’s highest income earners but by no means will the budget be balanced through an all-out tax crusade against the wealthiest Americans.
Thus far, the President has been noticeably quiet on the issue of entitlements and understandably so—much of his democratic base in Washington is inextricably tied to preserving these entitlement institutions. However, the President Obama will have to end his silence.
No individual member of Congress, all 535 of them, can ultimately muster the leadership and the political will to address this glaring issue. Can you blame them? Over 435 of those members will be facing an election in less than two years. There is however one elected representative in Washington who is constitutionally barred from running as an incumbent to his or her current office and that person is President Obama. It will ultimately be up to you, Mr. President, to turn your back on the base of your party and to call for entitlement reforms. These reforms will include some combination of raising the Social Security retirement age, the age for Medicare eligibility, the capping of eligibility for entitlement benefits, and the devolution of funding to the states. There is no congressional district in the United States where people will not be affected by cuts to these entitlement programs.
President Obama, you are ultimately the one person in Washington who has the political power to orchestrate entitlement reform. However unpopular these reforms will be for an aging population, a frank assessment of the trajectory of the federal budget shows that entitlement spending is the root cause of our budget woes.
Your legacy may be tainted, your image as a champion of the middle class put under question, but a long-term analysis of the United States’ fiscal situation dictates plain and simply that the there is no solving the budget shortfall without taking an axe to our entitlement spending programs.
Should President Obama resolve nothing, when the next President is inaugurated in 2017 he or she will face the entitlement issue through the lens of his or her potential reelection campaign in 2020.
President Obama, you have a window of opportunity to at least start the process of righting the wrong in our bloated entitlement budget. Argue for more taxes, argue for less defense spending, agree with Republicans to curtail certain domestic discretionary programs, but it will be solely up to you to lead all members of Congress towards a compromise on entitlement spending. President Obama, only you can catch the hot potato.