Posted by: theoptimisticconservative | July 7, 2011

It’s not the entitlements, it’s the discretionary spending

I’m going to make a statement many will find startling, and it has to be established with a bluntness that renders it incomplete, if we are to understand the issue.

Entitlements are not the problem for the federal debt in 2011.

Now, calm down.  Entitlements are a debt problem.  But they are not the reason the federal debt has increased 35% under Obama.  I’ll say that again.  Entitlements are not the reason the federal debt has increased 35% under Obama.

Obama has not added so dramatically to our national debt by putting new money into Social Security and Medicare.  His multi-trillion-dollar deficit-fest has not pumped cash into Social Security and Medicare.  Do I need to put this in three or four more ways in order to get the point across?  Entitlements are a systemic, long-term debt problem, but they are not what has caused the national debt to spiral from 2009 to 2011.

It’s all the Obama spending on other things – not on the two user-contribution entitlement programs that America’s seniors now rely on – that has caused the debt to skyrocket.  Ed puts it clearly in his excellent post today on the historic trends of revenue and spending:

Had spending increased at a rate of inflation from 2001 forward, we would probably not been in deficit at all. Had it stayed at the rate of inflation from 2006 forward, we’d probably be looking at historically average deficits in terms of GDP.

Those historically average deficits were bad enough, but in the context of historic trends in GDP, they warranted a deliberate, gradual approach to bringing them down, as opposed to stark panic.  The legacy of four years of a Democratic Congress (2007-11), however, two of them under Barack Obama, is a discretionary spending spree that does induce panic (e.g., in David Brooks).

It’s the discretionary, non-military spending that has skyrocketed since 2006 (and especially since 2009), not the entitlement spending.  Discretionary spending is where we have to wield the current-budget axe.  I would never say the Defense Department should be immune to cuts, but we can’t take these cuts primarily out of defense.  They have to come out of subsidy programs and regulatory agencies.  For starters, they should come out of the new spending that dates only to 2009.

None of this means we shouldn’t address Medicare and Social Security as soon as possible.  We should, and the Ryan plan for Medicare looks pretty good to me.  But it is essential to keep our categories in order, and not let emotion and the Democrats’ incoherent political narrative pollute the debate.

Consider what has happened:  Obama came into office with a Democratic Congress, and in two years this combination increased discretionary spending so much that the whole republic has been thrown into a panic about meeting our debt obligations.

But are we talking now about reducing discretionary spending, the variable that has changed the most since January 2009?  No. We’re doing all our talking about everything else.  Defaulting on debt payments, anger and dread about entitlement programs, raising tax rates, increasing revenue – we’re talking about everything except what has actually caused the proximate problem we face in 2011.

We have to stop falling for this.  All the new spending added under Obama is only two years old.  No one who has received money from it is a desperate senior with no other source of support.  Huge portions of it have gone to keeping unionized government employees in their jobs, along with renewable-energy subsidies, a host of “green” (and other) development projects of dubious value, and increases in regulatory planning and administration.  Some of the spending might be worth following through on (e.g., road improvements), but otherwise, it is this spending that ought to be eliminated first.  The House Republicans have been right about that from day one: roll spending back to the level of 2008.

Instead, the president is reportedly approaching today’s budget conference with the posture that it’s time to make cuts to Social Security.  This would be the second major signal in three days that Democrats are perfectly willing to cut entitlement programs – not reform them, just take whacks out of them – rather than forego tax increases and their favorite forms of discretionary spending.

Obama’s priorities – and the other Democrats’ – are clear.  We could cut current discretionary spending, which has spiraled out of control since 2009, in order to meet our debt obligations after 2 August 2011.  But they’re not willing to do that.  They are proposing everything else instead: not just tax-rate increases, but cuts to Social Security and Medicare.  Merely cutting those programs – without a scheme for phased-in reform – would have a terrible impact on today’s seniors.  The point is not whether the Democrats would actually let such cuts take effect; the point is that their leaders are fully prepared to discuss them in public, rather than even consider rolling back Obama’s colossal increases in discretionary spending.

Don’t let this administration set up false alternatives, so that it can induce bad compromises with panic.  The Republicans in Congress are doing the right thing, if not always in the exact way you or I would choose.  Until Obama gets around to discussing the reduction of his monumental increases in discretionary spending, GOP legislators should hold the line.

J.E. Dyer’s articles have appeared at Hot Air’s Green Room, Commentary’s “contentions,Patheos, and The Weekly Standard online.


Responses

  1. Some very good points. It was arguably foolish for Ryan to make the first move on entitlements because they are not the immediate problem. The Rs should have gone all the way into next year’s election pounding exclusively on the wasteful discretionary spending.

  2. I believe the House GOP plan since the 2010 election was to restore discretionary spending at FY 2009 levels, recognizing exactly your point — and another one, which is that the 35% increase became part of the baseline under current budget rules.

    Their problems are three-fold: (1) this can’t pass the Senate, (2) the President won’t sign such a bill even if it did, and (3) returning to 2009 is a tactic, not a policy. The Ryan Roadmap is a stab at crafting a policy, one that incidentally justifies the tactic of restoring the FY 2009 budget.

  3. Now Obama is talking tax increases. As you note, anything but cutting discretionary spending. In exchange for tax increases, spending cuts in the out years.
    Reminds me of the Israel-Palestinian conflict. Israel should give up real assets permanently in exchange for promises of future reciprocation.

    • tax increase are necessary if you want to cut into the deficit. restoring the Bush cuts is a fine idea.

      wars are expensive and combining wars with tax cuts for the wealthy didn’t work well, as should have been obvious.

      • Bush’s cuts in the income tax were actually weighted more toward the nonwealthy on a percentage basis. To call them “tax cuts for the wealthy” is merely to advocate a more extreme income redistribution through the tax code. It is also like saying that Kroger instituted “price cuts for the wealthy” when they dropped the price of Ritz Crackers ten cents. Yeah, the wealthy got to pay less, too.

        • yup, I’m one of those wild-eyed redistributionists that think that having the wealthy pay more than the middle-class is the way to go. I have this crazy idea that the folks with a lot of discretionary income (and the money to hire tax attorneys to devise methods of avoiding taxes) are inconvenienced less than the folks making the mortgage and having enough extra for two weeks vacation and to pay for their kids’ college tuition.

  4. Opticon: you are quite right that the immediate problem is to rollback the Obama increase, and get back to 2007 spending levels in the first year, then 10% cuts thereafter. This will cause some unemployment among the Federal employees, but they’ll vote for Obama whether they’re employed or unemployed. It’s really quite simple: each agency takes a 10% cut, and does the best it can. Welcome to the budget challenges that the private sector faced two years ago.

    I may be wrong but I don’t think that Ryan’s discussion re long-term reform hurts — particularly when it’s not going to be implemented until Obama is gone. And it gives a coherence to the R’s position on where our government should be vis-a-vis the private sector.

    BTW, Obama is only posturing when he talks about SS reform, etc. Sure it annoys his base a bit. But more importantly to him, it gives him a wonderful talking point as he pulls the wool over the eyes of those naive independents — “I put everything on the table. But those blood-sucking R’s won’t agree to anything. Blah, hope, blah, change, blah, infra-structure, blah widows and orphans.” Blah.

  5. Whati if, in exchange for an increase in the debt ceiling, Boehner and Cantor insist only that discretionary spending levels be rolled back to pre-Obama levels AND that Obama put forward a plan to reform entitlements. This would be such a clear and winning message in the debt ceiling debate for the Rs. All Obama has to do is present his plan by a date certain and his plan could be “do nothing”. At least that would enable us to debate the merit of both approaches. It also informs the public of the extent that Obama increased discretionary spending when he came into office.

    • Of course, Daria, that would also lead to a default….which may not be something that will benefit the country and may not be something for which Americans will thank Boehner and Cantor.

      so let them insist on whatever grand prize or great grail that they’re pretending they might win.

  6. Why isn’t the solution simply to do nothing — just keep the debt limit where it is? This would force the administration to cut spending across the board, by 10%, say, per year.

    No more debt. We’re broke. Cut the spending, now.

    • why would it force uniform “across the board” cuts?

      why wouldn’t the administration decide to gut the spending that goes to Boehner’s and Cantor’s districts, for example?

      How about stopping the work going to the GE Aviation plant in Boehner’s district?

      And of course Cantor fought against Sec Gates when Gates refused to approve spending for that second engine for the F-35s.
      The Rolls-Royce plant in Cantor’s Richmond district was gonna get a lot of the work that Cantor’s ally in fighting for the extra half-billion initial order, Boehner was bringing to GE.

      maybe across the board wouldn’t be in the cards, maybe all those tax breaks that Virginia gave so that Rolls-Royce would build there won’t be paying off in jobs …maybe one of the jobs lost would be Eric’s.

  7. Fuster, you’re quite right. If faced with no raise of the debt ceiling and the necessity of cutting spending right here and now Obama would be very likely to target spending so as to hurt his “enemies,” that is, those elected like him to serve in the government, as much as possible. Honestly setting priorities for the good of the country as a whole and making cuts accordingly is not in his MO.

    • No, Margo, Obama was elected by the majority of voters nation-wide and he serves the nation.

      Boehner and Cantor were elected by vastly smaller constituencies and they seek to thwart Obama. Whichever side of this debt debate you fall, you should be able to see that if Boehner and Cantor’s political tactics are fair game, so would be threatening to have the consequences fall heavily upon their own districts.

  8. Fuster: I have no doubt that Obama would act perniciously. So be it. Such a course of conduct would only increase the chance of his being out in 2012.

    And by the way: there’s nothing to stop him now from screwing his “enemies” and feathering the nests of his supplicants. Isn’t he trying his best to do so every day?

    But the point remains: we’re broke. Cuts have to come somewhere. I suggested across the board. You say he’ll cut his enemies. Notice that we’re now talking cuts, not bogus “investment” in job-killing government excesses.

    • DAN, a whole l;ot of economists of economists argue that we’re not as broke as a different lot say that we are.


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