Paul Ryan
says it’s going to happen, the sequestration, that is. One can
hardly imagine any alternative scenario, in which Democrats and
Republicans work it all out, and come out singing Kumbaya with a deal to
avert the workings of the automatic cuts, share and share alike, to
domestic and defense discretionary spending.
Certainly, it would be better a) to prioritize cuts, and b) to
reform entitlements such as Medicare and Social Security over a
longer time line. The former is just common sense. The latter would
reduce any short-term hit on the economy while improving the
long-run balance sheet of the nation and head off cascading and
uncontrolled spending and inevitable tax increases caused by
changing demographics, i.e., low birth rates and an ageing
population, and the fact that the entitlements are on auto-pilot
and not subject to negotiations or restraint in the normal
budgetary process in Congress.
But no Democrat is willing to jump on entitlements. No
Republican wants to jump, say, on farm subsidies or defense
spending. Let the grandchildren be damned.
For some time now I have been resisting the inexorable
trajectory of my thought process regarding the budget process. In a
sane world responsible grown-ups think about the future of the
commonwealth and the fate of their children’s children, recognize
that ours is a spending problem not a revenue problem, and get on
with the hard work of restructuring the federal budget, again, over
time, in such a way as to make the medicine go down more
easily.
To put it another way, as bad as the current
national debt is, now over $16 trillion, up from $2.9 trillion
from the Reagan era, it pales next to the unfunded liabilities for
entitlements, again, Medicare, Medicaid and Social Security. The
GAO puts the shortfall at $45.8 trillion over 75 years,
requiring an additional $612 billion a year to overcome it.
Others, pointing to a range of items, on and off, budget,
including federal pensions and retirement health care,
argue that the actual figure is closer to $86.8 trillion.
Whatever figure you find more credible, it is several times
higher than the $16 trillion figure commonly used in these
discussions. So wouldn’t it make a lot of sense to engage in
structural reform of entitlements as the number one priority even
as some reasonable restraints are placed on discretionary
spending?
Not gonna happen. It certainly hasn’t to date, and there is no
indication that it will anytime soon. So we will proceed to cut
discretionary spending, that is everything that makes up what most
citizens think of as “government” — defense, National Parks, the
Weather Service, infrastructure and the like — leaving the
entitlements to careen towards ultimate collapse too.
Ryan, House Budget Committee chairman, has been charged by his
caucus to come up with a plan to eliminate the deficit in ten years
without raising taxes. It isn’t as if his first plan for achieving
a balanced budget in thirty years wasn’t controversial enough.
Obviously, either approach requires addressing entitlements, which
is a good thing. But Democrats will not play ball on balancing the
budget in either ten or thirty years. We hoped this impasse would
be resolved by the last election, but here we are again.
So maybe we should thank our lucky stars that, due to blind dumb
luck, we have stumbled into sequestration, a $1.2 trillion
mandatory cut Congress designed to be so draconian that it would
have to do something else. The “something else” has little chance
of happening. Thus, Ryan’s prediction that the sequestration is
going to happen is probably correct.
According to Professor Jeff Bergner,
writing in the Wall Street Journal, “Some would
inevitably argue that these cuts are unfair. Is the current budget
fair? Everyone knows that a $3.6 trillion budget isn’t the happy
result of Congress providing exactly what is ‘fair’ to every
program.”
“The federal budget is the result of temporary and arbitrary
political compromises, with each program funded as much as its
advocates can get it and as little as its detractors can support,”
says Bergner.
Bergner points out “There is no transcendent wisdom here, nor
any argument that a federal budget that preserves the current
allocation of spending, but at a slightly lower level, is somehow
less fair.”
“Are we really to believe that a government that spent $2.7
trillion five years ago couldn’t survive a 3% cut that would bring
spending to only $3.5 trillion today?” asks the good Professor.
Ergo, let it rip. Maybe it is time to start loving the
sequestration.
Photo: UPI
