Ben Smith Says the Left Won’t Object to Entitlement Cuts
Politico’s Ben Smith claims that Barack Obama can get a free pass from the left if he moves to gut Social Security and Medicare:
President Barack Obama plans a busy February. The new administration hopes to have a stimulus package passed by Congress, a new plan in place to shore up ailing banks and, by month’s end, to hold a “fiscal responsibility” summit.
If the stimulus and banking bailout weren’t controversial enough, the summit fills some entitlement reform critics with dread, as they fear it could speed calls for cuts to Social Security and Medicare.
Strikingly, however, Obama appears to be getting unusual room to maneuver on entitlements by most of his liberal allies. On the subject of entitlement reform, in fact, Obama’s honeymoon continues — at least in the unlikely precincts of the Democratic left, a counterintuitive development that has buoyed the spirits of reformers who would like to see drastic changes in the way Social Security works.
I’m not sure what the administration’s thinking is, but certainly I wouldn’t be silent if he were to propose draconian cutbacks in Social Security and Medicare. On the other hand, if Obama wants to get the long-term public fiscal situation in check by tackling its main root cause—runaway cost inflation in the health care sector—I would applaud that:
I have some reason for confidence that Obama will, in fact, do the right thing. That’s because the liberal perspective on this is espoused by, among other, Office of Management and Budget Director Peter Orszag. The chart above comes from his Congressional Budget Office days when he produced a masterful slide series entitled “Health Care: Capturing the Opportunity in the Nation’s Core Fiscal Challenge” which defines the “fiscal challenge” correctly as less an “entitlement” problem than an “health care” problem. You could solve the entitlement problem fairly easily, if brutally, without tackling the health care problem—just pair back benefits. And then instead of a bankrupt state you’ll have bankrupt families and you won’t have achieved anything. But if you can solve the health care problem, you’ll have done most of what needs to be done and set the stage for tackling other issues.
68 Responses to “Ben Smith Says the Left Won’t Object to Entitlement Cuts”
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February 12th, 2009 at 8:51 am
me neither.
February 12th, 2009 at 8:58 am
Oh noes! Ben Smith knows my thoughts.
February 12th, 2009 at 9:04 am
I gotta say that chart is probably complete bullshit. No one knows what the situation will be in 2082, just like no one in 1934 knew what the situation in 2008 would be like.
February 12th, 2009 at 9:04 am
Grammar police alert–
“An ‘health care’ problem”? That doesn’t sound right unless you’re Cockney or somefing. Shouldn’t that be “a ‘health care’ problem”? I can never tell with the whole “a or an before h” debate. I do know that “just pair back benefits” is wrong.
February 12th, 2009 at 9:06 am
Yes, it *is* striking that the Democratic left has not yet begun to criticize Obama for something that Obama has yet to actually suggest!
Ben E. Smith, Super Genius.
February 12th, 2009 at 9:09 am
I just wish that someone would beat the shit out of all these god damned annoying self-appointed concern trolls who have this weird hard-on to get Social Security payments cut.
February 12th, 2009 at 9:09 am
Great, so Matt’s solution to the entitlement crisis is to gut the health care industry — an industry that produces millions of high-paying jobs for Americans, in addition to creating new life-saving advances every year. It also happens to be an industry where Americans who didn’t get to go to rich-boy private schools like Matt did can still earn a six-figure income.
In Matt’s world, rich liberals will still get cutting edge medical treatment while everyone else will get British-style care. On the bright side, by gutting our health care industry, we’ll finally get our fiscal house in order, like Britain has. Oh wait — Britain’s actually in worse fiscal shape than the U.S., so it has nothing to show for its shitty socialized health care.
The entitlement crisis is just that — an entitlement crisis. Democrats have bought votes for seven decades by telling Americans they were entitled to benefits they hadn’t paid for in full. Gutting the health care industry in this country won’t solve the crisis anymore than it did in Britain. The only solution is for people (all people, not just the rich) to pay more in taxes, save more, and stop expecting free lunches from the government.
February 12th, 2009 at 9:09 am
Ah yes, Obama’s masterly handling of crisis and excess in the finance sector should give us all great hope that he’ll bring his laser like focus and almost god like intellect to our health care system. Not to mention a similar group of consumer friendly technocrats.
And yet and yet I recall Obama’s unreserved support for TARP… oh wait that was when he was busy lying about his smoking habit.
Nicotine is such a b.
February 12th, 2009 at 9:11 am
The article doesn’t contain anything to support Smith’s implicit contention that Obama wants to cut Social Security, so maybe the reason Obama isn’t getting any flak from the left on his plans to cut Social Security is because he doesn’t have any such plans. An alternative, and more honest title for his piece might be “Left silent on thing Obama isn’t doing.” If Obama proposes taking either an axe or a scalpel to SS, you can be sure there’s going to be outrage from the left.
February 12th, 2009 at 9:11 am
Ben Smith’s idiocy is a typical product of political journalism untethered from any consideration of policy.
February 12th, 2009 at 9:15 am
We ought to cut Social Security, if only for the Baby Boomers. They inherited the greatest country in the world and they mortgaged it. They’re leaving us $10-12 trillion in debt. Screw ‘em.
February 12th, 2009 at 9:16 am
Medicare and Medicaid are the marginal players which keep the system operating. Significant cuts in them would eliminate most profit from the system and bankrupt many medical institutions.
In theory the for profit medical system could operate quite well serving 50% of the population who are insured or self insured. As long as they are not forced to serve those who are not. Good luck with that.
February 12th, 2009 at 9:18 am
an industry that produces millions of high-paying jobs for Americans
Yes, those jobs as billing clerks and clipboard pushers are ones that Americans can aspire towards. Oh.
In the meantime, Fred likes the idea of a third-world healthcare system, in the hope that it might kill off a few more dumb coloreds.
February 12th, 2009 at 9:20 am
Here here!! That generation voted in Regan, Bush I, and Bush II because they were tired of paying taxes. Its time to remind them that elections have consequences. Since most of the SS “trust fund” is in government T-bills maybe we should consider expunging that debt and help put the national debt a little more in check.
February 12th, 2009 at 9:26 am
“You could solve the entitlement problem fairly easily, if brutally, without tackling the health care problem—just pair back benefits.”
Uhmmm…. there is no proof there is even a problem with SS entitlements. They think there might be sometime in the 2040s, but they aren’t really sure. I think we should wait until at least the late 2030s to tackle the problem, if it exists.
As far as Medicare goes, we can solve this problem by having universal healthcare. If you solve the problem of how to provide everyone with universal healthcare, then you will have, by default, solved any problems with Medicare.
February 12th, 2009 at 9:37 am
Yes, Smith’s piece is weak, but
“unusual room to maneuver” ≠ “a free pass from the left”
and
“a ‘fiscal responsibility’ summit” ≠ “draconian cutbacks in Social Security and Medicare”.
Your arguments suffer when they include unsupported leaps like these.
February 12th, 2009 at 9:40 am
Why can’t we just tell Republicans that Social Security is already bankrupt, and not pay them any benefits?
February 12th, 2009 at 9:50 am
“As far as Medicare goes, we can solve this problem by having universal healthcare.”
Another steel trap liberal mind at work. Let’s re-trace the thought process:
1) Costs for Medicare — the universal health insurance program for senior citizens — are growing at an unsustainable rate.
2) Expand Medicare to everybody! Universal health insurance!
3) Underpants gnomes!
4) Problem solved.
February 12th, 2009 at 10:11 am
Social Security is still the Third Rail of American Politics. Bush demonstrated that pretty clearly. Only the clueless believe ANY Democratic politician would make reforming a program that is working very well a priority when there are so many Republican/Bush screwups to take care of first.
Obama isn’t clueless.
If however Obama does decide to “cut” Social Security in some way I’ll be glad to join again with the other millions who rose up in opposition when Bush tried to “fix” Social Security at the start of his second term.
Oh … as an aside … have you ever heard Republicans sound more desperate (and ridiculous) than when they try to argue that a man in office for less than a month should have already solved the greatest financial crisis of our generation? You’d almost think they want their President, Barack Hussein Obama, to fail in his efforts to help America get back on its feet. You’d think that being sure in their knowledge that government can’t solve anything would make them give their President, Barack Hussein Obama, some slack for not having single-handedly righted the world economy in three weeks. Alas, they seem unable to see how they appear to the rest of us in America who are rooting for our President, Barack Hussein Obama, to succeed.
February 12th, 2009 at 10:13 am
“Minor tweaks” on the revenue side of Social Security have taken it from a tax of 2% on the first $3,000 of income to 12.4% on the first $106,000.
February 12th, 2009 at 10:16 am
Ben just misheard a little. What the left actually said is that nobody would mind if Ben Smith’s nuts were cut off.
February 12th, 2009 at 10:34 am
I believe the Orszag plan results in something like a 9% benefit cut phased in over 50 years and achieves solvency through a series of tax increases which are progressive in nature. Doing nothing results in 20% cuts over the same time period. The ‘There is No Crisis’ crowd were right to fight the Bush plan but that approach results in 200% worse cuts than the Orszag approach over the long term. I think that’s weak sauce today.
February 12th, 2009 at 10:42 am
I think consideration of what “excess cost growth” means is missing from the debate. If the apple industry keeps producing the same number and quality of apples, but the cost of apples rises quicker than inflation, we have a bad “excess cost growth in the apple industry”. Bloggers should be outraged.
But I assume this isn’t what we mean when we talk about health care. Perhaps the excess cost growth is driven by factors like a) increase scope of maladies that can be treated; b) increasingly effective treatments, which are also more costly. Perhaps we are buying higher quality healthcare for the “excess cost growth”.
In the end, I have to wonder, what is wrong with spending more of the GDP on health care, assuming we are getting improved quality of life (and longer life) in exchange?
February 12th, 2009 at 10:43 am
You spelled “pare” wrong.
February 12th, 2009 at 10:43 am
Costs for Medicare — the universal health insurance program for senior citizens — are growing at an unsustainable rate.
What Fred doesn’t mention is that Medicare costs reflect the famine-to-feast mentality promoted by America’s third-world healthcare system.
If you’ve suffered through high deductibles and nickel-and-diming bastards denying claims all your life, you’re going to take everything that Medicare offers once you’ve retired. And you’re probably going to deal with the ongoing health issues that you couldn’t afford to treat when you were working, or were too afraid to get checked up because they’d become “pre-existing conditions”.
February 12th, 2009 at 10:44 am
In Matt’s world, rich liberals will still get cutting edge medical treatment while everyone else will get British-style care.
Having lived in Britain and had experience with the British health care system, it constantly surprises me that conservatives use it as a Boogey Man. Their health care costs are significantly lower than ours (proportional to population size), and the National Health is in general much more effective and humane than our patchwork system. And they’re not even the best example of universal health care. Try looking at infant mortality rates in the U.S. compared to Canada and Europe–it’s shameful. All the more so because the reason we have our system is right-wing paranoia about the State (which in the right-wing bizarro world is bad when it provides services but good when it taps our phones and tortures people) and a powerful insurance and hospital lobby.
February 12th, 2009 at 10:54 am
Did he mean social security??
I thought we were cutting Wall Street entitlements.
February 12th, 2009 at 10:55 am
Wait, is “entitlement” “reform” really the next thing on the agenda? What happened to healthcare? Employee Free Choice Act?
February 12th, 2009 at 10:57 am
This liberal is all in favor of cutting entitlements in the form of means-testing.
February 12th, 2009 at 11:04 am
Fred, use teh google. At this point, U.S. physicians and their professional associations are on board with national health care by a clear majority. Docs know better than most that the overall quality of patient care, under what’s left of our health care system, is declining.
February 12th, 2009 at 11:20 am
Atrios’ term (shitstorm) is the correct description of the liberal reaction to gutting Social Security.
And sorry to rain on anybody’s bias parade, but we boomers are much more liberal than the cohorts on either side of us. I just figure that pointy headed young bigots are depressed that slurs based on race, gender and sexual preference no longer cool. Boomer slurs are just cutesie age-based slurs, so I suggest purveyors of such just resolve their differences with mom and dad and save their bigotry for their own blogs.
February 12th, 2009 at 11:22 am
Wait, is “entitlement” “reform” really the next thing on the agenda? What happened to healthcare? Employee Free Choice Act?
Well, bear in mind that “entitlement reform” has appeared on the administration’s agenda only in the form of maybe at some point allowing people to talk about entitlement reform at some kind of summit. As opposed to health care, which Obama has identified as a year one priority.
February 12th, 2009 at 11:35 am
There’s a huge difference between “gutting” Social Security, and making strategic reforms to it (like some sort of benefits means-testing). The topic is pretty politically polarizing, but the solutions really aren’t all-or-nothing.
-Aaron Street
February 12th, 2009 at 11:35 am
WTF is “excess cost growth,” and why does this graph go out to 2082? We’re looking at problems developing over the next few decades, not the next century.
February 12th, 2009 at 12:24 pm
The easiest, fastest, and most logical way to fix social security is to:
1. Do means testing for benefits so that those who don’t need it don’t get it (as Bosch’s Poodle mentioned earlier);
2. Raising the cap on what income to tax for SS;
3. A combination of both.
I realize the right will find it unfair that, after profiting off of poor people, they need to help them in old age. But in a decent society, this solution, rather than cuts, would better help our aging citizens have a better quality of life.
February 12th, 2009 at 12:36 pm
Is this guy on crack?
Uh, yeah, the left never criticizes its leaders if they sell out.
WHAT?!?
February 12th, 2009 at 12:48 pm
[British] health care costs are significantly lower than ours (proportional to population size), and the National Health is in general much more effective and humane than our patchwork system. And they’re not even the best example of universal health care. Try looking at infant mortality rates in the U.S. compared to Canada and Europe–it’s shameful.
If you are going to use infant mortality as your yardstick then you need to normalize the measurements. Canada and most of Europe uses a different system to judge birth viability (e.g. the US is much more lenient in what it considers a “live birth” than Canada and Europe). If you were to actually take a look at statistics that normalize the measurements you would see that the US has an infant mortality rate that puts it in the middle of the western/developed nations pack.
February 12th, 2009 at 12:58 pm
The problem with means testing is that if this is implemented, Social Security will start to seem like welfare and will therefore lose a lot of its support. While means testing might be fair, in the long run it will kill the program.
However, removing the income cap on SS taxes is a much better idea, so long as we don’t remove the cap on payments. As it is now, what you pay in to SS determines what you get out of it. We want to keep that part of the system mostly in tact, but if we remove the cap on taxes, we want to cap off the benefits we pay out. In other words, if you end up paying your 7.5% on a $5,000,000 income, you won’t end up getting $30,000 a month from SS. You’ll get the same as someone who paid taxes on $92,000.
That solution would be fair, would raise Social Security revenue substantially, and would not turn the program into welfare.
February 12th, 2009 at 1:03 pm
Lazyass being miffed at Obama doesn’t qualify as ‘criticism from the left.’
February 12th, 2009 at 1:04 pm
Social security obviously needs to be more generous. Is that the reform we are talking about? And medicaid has to be part of a socialized medical system. This is the only way to cut down on the wasteful spending on healthcare in this country. Abolish most of the public/private interface, get rid of the insurance paperwork, make it government financed and tax supported. That’s really all there is to it.
Retirement, as if obvious by now, can’t be carved out of the private sphere. We could do a good thing by shutting down the tax credit for 401(k)s, as Theresa Ghilarducci has suggested.
Of course, the Chilean system the chicago boys were all so proud of, on which Bush wanted to model the “reform” of social security, lies in ruins.
February 12th, 2009 at 1:33 pm
The idea that the average median-income worker would be able to rely on a 401k to retire comfortably has always struck me as obvious horseshit. The shift to the 401k has been good for corporate profits, though. Maybe once the Boomers figure that con game out, we can start implementing a universal defined benefit pension plan to supplement SS.
February 12th, 2009 at 2:20 pm
Smartypants Ben Smith sniffs:
The “central talking point” has the benefit of being, well, true.
February 12th, 2009 at 2:21 pm
It’s a matter of degree. Certainly, we shouldn’t spend 99% of GDP to keep a single coma patient alive for one more day.
Our decision making process as to what constitutes a worthwhile expenditure is arbitrary. We delude ourselves into thinking that it is either guided by market forces, or by objective expert analysis. Neither of these is the case. It is driven by lawsuits, lobbyists sweethart deals and sick celebrities.
No one has a financial stake in determining effective medical procedures except for those who pay the ultimate cost – patients and taxpayers. We don’t make those decisions. The people who do make those decisions are not answerable to us. Therefore, the decisions are made badly.
February 12th, 2009 at 2:57 pm
Not only would Obama (or anyone else) walk into a buzzsaw by attempting to cut Social Security benefits, but Tom Geoghegan is running for Rahm Emanuel’s seat in Congress on a platform of substantially increasing Social Security, so that it constitutes a real pension, not a partial one, especially for people whose retirements have been devastated by the economic catastrophe.
The argument against this has always been then there’s no money. But after the trillion-dollar Iraq war and trillion-dollar bailout of irresponsible banks, “no money” is a lie that will never be believed again. The money’s there. It’s only a matter of priorities.
February 12th, 2009 at 2:58 pm
Wasteful programs like Social Security and Medicare should long ago have been eliiminated. In these hard times keeping the old, infirm and poor around makes no sense. Let’s let President Obama know that even liberals and leftists are good Americans and that we’ll applaud his efforts to make the tough fiscal cuts America needs.
February 12th, 2009 at 3:37 pm
Is Trevor joking? Does he want euthanasia as well?
February 12th, 2009 at 5:12 pm
Mark D, while your solutions would make SS solvent, I don’t think most americans support changing SS to a full-blown welfare model.
February 12th, 2009 at 5:26 pm
Well okay, but who is slated to be Orszag’s Executive Associate Director (apparently the equivalent of principal Deputy Obama Names OMB Officials? A guy named Jeffrey Liebman (whose name has turned up on Matt’s site before). Some of us know Prof. Liebman as one of Obama’s first three economics advisors. Others as one of the authors of LMS: the Liebman-MacGuineas-Samwick Non-Partisan Social Security Reform Plan This is a profoundly worker-hostile plan which includes a package of worker funded tax increases/benefit cuts totaling 5.1% to combat a ‘crisis’ scored by SSA at 1.7% and then doesn’t actually fix anything.
Orzsag can’t be everywhere. And I keep hearing echoes of LMS in Obama’s rhetoric, in particular the cap increase which is straight from the Plan. Prof. Samwick (a former top Bush economics advisor) has told me directly that Liebman did his best to pull the plan somewhat to the left. But given that he is lead author and the paper is hosted on his Kennedy School website I have to believe he is still pushing it.
Evidence that the sky is falling? No. Reason to keep looking upwards once in a while. Yep I think so.
February 12th, 2009 at 5:42 pm
Buy a calender. Current Boomers range in age from 45 to 63. When Bush II entered office that was 37 to 55. When Bush I entered office that was 29 to 47. And last I checked the higher reaches of Congress have always been mostly drawn from people in their 60’s. The notion that Boomer’s are responsible for that $10 trillion in debt is kind of laughable, in 1992 some of us weren’t even old enough to RUN for Senate and maybe a fourth old enough to qualify for President. Moreover we are entering retirement leaving you ungrateful punks with a $2.4 trillion Social Security Trust Fund that is scheduled to be a couple of trillion more by the time the last of us leaves the workforce.
Every bit of the future gap between Social Security’s project costs could be made up by average GDP growth in the outyears at 2.6% which is substantially less than the average since Boomers were finally in the workforce in full. Get off your Gen-X slacker couches and grow the economy like we did.
I mean if we are going to engage in petty name calling at least get your facts right.
If anyone screwed anybody it was the War Babies exemplified by GW Bush. Get your targets right.
February 12th, 2009 at 5:59 pm
Orzsag’s plan is maybe the least objectionable but it is soundly beat by ‘Nothing’.
The current payroll gap between fully funding the current schedule of benefits is 1.7%. Do the math and then compare the price of other plans that do not in fact produce 100% anyway, even after imposing benefit cuts and increases in retirement age. Moreover that payroll gap has on average been shrinking since it hit 2.23% in 1997. Over that same period the date of Trust Fund depletion has been shoved. back from 2029 to 2041. Though progress has stalled since the date was set at 2042 with the 2004 Report we are still looking at push back at a rate of a year for year. There is probably an apt word for a problem receding at the rate of a year per year (meaning it might never happen) and getting on balance smaller with each year of inaction, that word is not ‘crisis’.
Oh and in real terms what is the benefit in 2040 scheduled to be? Because initial benefits are set by increases in real wages which historically have risen over time (though Bush did a heckuva job in stalling that in recent years) it turns out that the answer is 160% of that of a similarly situated retiree gets today. The 2008 Report projects that we would need to slice that to 78% of the schedule after 2041. Well as Professor Rosser of JMU pointed out to me a while back 78% of 160% = 125%. Basically Gen-X is whining because there benefit MIGHT get cut back to only being 25% better than my Mom gets today and that the only answer is to screw Boomers out their own fully funded benefits (by 2041 we will be rapidly exiting the scene).
Can I have my $2.4 trillion back? Because some of the kids these days don’t seem to appreciate it.
February 12th, 2009 at 7:00 pm
DTM wrote:
Although it takes some work to sort this all out, basically it is pretty clear that there was a relatively pro-Republican bubble moving through these elections roughly coincident with the Boomers plus the people immediately older than them by about 10 years.
Actually Gen X seems to be a lot more strongly Republican than the boomers, take a look at the graph of “age and party identification in 1992″ on this page. Fortunately Gen Y is more strongly Democratic than any other age group (see here), so that’s a hopeful sign for the future.
February 13th, 2009 at 12:48 am
No problem, you can have it all back as soon as you pay off that tidy $11,000,000,000,000 debt you left us in Gen X. You left this debt because your generation was too selfish to pay your fair share of taxes and instead took out loans that come due for future generations.
It’s very nice that you think you deserve generous SS payments because you already “paid” for SS, but sorry our resources will have to be diverted to paying off your bad debts instead.
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