You have to walk before you can run, and before you can learn to walk, you have to take baby steps. Maybe that’s what just happened in Washington with President Obama’s budget proposal.
His 2014 plan, two months late and no doubt dead on arrival, includes "cuts" to Medicare and Social Security – "cuts" meaning that spending still would increase, but not as much as it would otherwise.
One notable change is in the way that Social Security benefit increases would be calculated. Currently, those amounts rely on the consumer price index, or CPI, and are based on inflation. If the price of steak increases a dollar, then the payments increase accordingly.
Obama’s budget uses a formula known as "chained CPI," which takes into account the way consumers behave in real life. If the price of steak increases, then people buy more hamburger or chicken.
Predictably, the proposal has created a backlash among many Democrats and among seniors groups. A lot of seniors need that money, particularly for pharmaceuticals. Even before the proposal was released, the AARP for months has been running ads criticizing any CPI change.
By including chained CPI in his budget, Obama is making official a stance he lately has been taking when talking with Republican leaders. They have been saying for a while, at great political risk, that something needs to be done about Medicare and Social Security and even voted twice to change Medicare quite a bit. Those programs are growing unsustainably because we are aging as a society, living longer, and paying more for health care. Money would be available to deal with this, but the programs’ trust funds have been raided for decades to pay for other government spending.
The government is now $16.8 trillion in debt and adding another $1 trillion each year lately – about $3,000 more debt annually for every American man, woman and child for a total debt of more than $50,000 for each of us.
In 2012, the federal government spent about $3.5 trillion. Of that, $1.2 trillion was spent on Social Security and Medicare. Add Medicaid, defense and interest on the national debt, and the total is $2.4 trillion – almost the same amount as was collected in taxes.
That means the federal government borrowed money to pay for almost everything else it did last year – the FBI, cancer research, Pell grants, highway construction, etc.
That’s the spending perspective. On the tax side, we paid $2.4 trillion in 2012 and spent $3.5 trillion. That means we all were paying only two-thirds the taxes we should have, considering we as voters refuse to make Congress cut spending. That remaining one-third will be repaid, with interest, by our kids.
We should be ashamed.
You might think Republicans would be pleased that Obama has partly endorsed their way of thinking, but many say, correctly, that his proposals don’t go far enough. On the other hand, Rep. Greg Walden of Oregon, who leads the House Republicans’ campaign committee, is going the other direction and saying Obama is attacking seniors. Obama’s budget also includes tax increases on the wealthy, which Republicans are no longer in the mood to talk about after taxes on the wealthy were increased earlier this year.
So Democrats and Republicans, as usual, are not in a cooperative mood. That’s why I called this a baby step.
Really, the most important thing that’s happening isn’t that Obama is proposing a particular policy change to Medicare and Social Security. It’s that he’s talking about the national debt in a serious way at all. This is a subject that ought to come up in presidential election years. It didn’t, much, in 2012. In non-presidential election years, only the president can lay out such big picture challenges to the American people. So far, Obama often has chosen to capitalize on these problems rather than solve them.
At least we might actually have a national conversation about the national debt instead of all this baby talk. At this point, I could live with any combination of spending cuts and tax increases so long as it gets us to a balanced budget before too long so we can start paying down the debt. If the American people don’t want to touch Social Security and Medicare, then that’s fine, really. We’ll have to increase taxes a lot and cut everything else a lot.
Either way, it’s going to involve many difficult choices. But we’re all adults, not babies, so we ought to be able to make them.
Steve Brawner is an independent journalist in Arkansas. His blog — Independent Arkansas — is linked at arkansasnews.com. His e-mail address is firstname.lastname@example.org