Obama’s Budget Proposal: Is It A Trap?

You don't have to be Admiral Akbar to suspect that the President's refusal to deal with entitlements in his budget proposal is a trap for the GOP.

Over at Politico, Glenn Thrush speculates that President Obama’s underwhelming budget plan, and his decision not to propose anything regarding entitlements, is actually a cleverly laid political trap for the GOP:

Obama’s decision to avoid entitlements was instantly deemed as irresponsible. Progressive blogger Andrew Sullivan interpreted the message as “screw you, suckers” to future generations. The usually Obama-friendly Washington Post editorial page pithily described him as “Punter-in-Chief.” Republicans expressed outrage.

But for Hill Democrats — so often at odds with Obama for the past two years — this omission was no sin. It was a gift, in their view, the setting of a political trap for a Republican Party divided between conservatives pushing for major changes to Medicare, Medicaid and Social Security and a GOP leadership wary of the political peril of tinkering with Americans’ retirement security.

With Obama refusing to offer his own plan for entitlements, congressional Republicans — as the president noted — rushed in to fill the vacuum.

“I was glad to see yesterday Republican leaders say, ‘How come you didn’t talk about entitlements?'” said Obama at his news conference Tuesday, repeatedly rebuffing reporters’ attempts to get him to offer his own entitlement reforms. “I think that’s progress.”

And, in fact, Republican leaders have ruefully agreed to unveil their own list of “significant, not around-the-edges” reforms, according to a GOP aide.

“They are suckers,” said one senior Democratic congressional aide of the House GOP plans to release the first detailed proposals to reduce entitlement spending. “They have painted themselves into a corner.”

Of course, if you listen to what the President is saying you get a different story:

“Part of the challenge here is that this town — let’s face it, you guys are pretty impatient,” Obama said. “If something doesn’t happen today, then the assumption is it’s just not going to happen, right? … [T]he fiscal commission put out a framework. I agree with much of the framework; I disagree with some of the framework.”

Instead of offering specific proposals, Obama suggested a political path, arguing that bipartisan deals on stopgap funding measures and the 2012 budget — still distant prospects — could pave the way for a longer-term partnership.

“I’m confident we can get Social Security done in the same way that Ronald Reagan and [late Speaker] Tip O’Neill were able to get it done, by parties coming together, making some modest adjustments,” Obama said. “I think we can avoid slashing benefits, and I think we can make it stable and stronger for not only this generation but for the next generation.”

That’s all well and good, but while President Obama is talking the talk of bipartisanship and working together to avert a national crisis, his fellow Democrats on Capitol Hill are already preparing to declare political war the moment that any Republican pokes their head up out of the tall grass and suggests anything resembling reform of Medicare, Medicaid, or Social Security. In fact, we already know the script:

Democrats are likely to portray whatever the GOP produces as the Son of Privatization, and Sen. Charles Schumer (D-N.Y.) previewed that strategy Tuesday night, saying the Republicans’ “idea of entitlement reform will be privatizing Social Security and turning Medicare into a voucher system.”

It’s the standard Democratic play any time there’s talk of “entitlement” reform. Back during the Reagan Administration, we were told that the President’s plans would lead to old people starving or eating cat food. When George W. Bush made his half-hearted, largely ineffectual, and completely feckless effort to reform Social Security, the knives came out almost immediately, and Democrats in Congress cheered loudly when the President expressed regret that his efforts had ended in failure.  If the past is any indication, then we can expect the same cynical political game to be played if and when the GOP releases a budget that includes “entitlement” reform, even if that reform is very modest.  It would be, after all, politics as usual.

There’s just one problem. We can no longer afford politics as usual. We’re fast approaching the point where dealing with our fiscal problems will no longer be a matter of choice, but a matter of necessity. If we wait until then to address our problems, the choices we”ll be faced with will be far more limited and far more painful. It would be better to deal with them now, when there are more options available, and more time to implement them. Instead, we seem destined to end up playing the same stupid political games we always do. It is, as Chris Christie noted today at AEI, fairly ridiculous:

New Jersey Gov. Chris Christie (R) took aim at both Democrats and Republicans during his speech in Washington on Wednesday, which sparked further speculation he could seek higher office.

Chrtistie knocked both parties for shying away from drastic measures to solve the country’s fiscal woes. The outspoken governor mocked President Obama’s proposals for high-speed rail and broadband as “the candy of American politics” and also criticized Republicans in Congress for not putting forth a bold proposal on entitlement reform.

You cannot fix these problems without talking about them,” he said during a speech at the conservative American Enterprise Institute (AEI). “And I look at what’s happening in Washington, D.C., right now and I’m worried. I’m worried.”

Obama is not talking about entitlements because he is waiting for the Republicans, Christie said, “And our new bold Republicans in the House of Representatives … are not talking about it because they are waiting for him to talk about it.

“Whatever game that is being played down here, is irresponsible, it’s dangerous.”

We need to deal with this issue like adults. That means talking about things like lowering benefits, increasing the retirement age, means testing, and, yes, some form of privatization.

Sacrifices will  have to be made, and they will have to be made by all sides and by all players. The idea of a fully funded government-run retirement system needs to go out the window. People need to recognize that Social Security is, at best, a supplement and that they are primarily responsible for planning for their retirement and that Medicare cannot fund every single medical procedure they are going to need from the day they retire to the moment they die. In 2009, Medicare spent $55 billion related to doctor and hospital visits during the last two months of a patients life. Partly, this is because most Americans seem adverse to having discussions with their doctors and loved ones about end-of-life care before its too late, meaning that it when the time comes all possible measures are taken without any regard to who’s paying the bill. Call it rationing if you want, call them death panels, but it’s a topic we need to talk about, and we would if were willing to act like adults.

In the end, this is all our fault. We voted in the people in Congress who are refusing to address the problems that everyone can see as clearly as an on coming train. To a large degree, the . And in the end, we aren’t really being clear with them about what we want so they’re just acting accordingly. At some point we’re going to be forced to deal with these problems, but I have a feeling  it’s not going to happen until we start feeling the pain that we could ward off if we’d just grow up already

FILED UNDER: Barack Obama, Deficit and Debt, Health Care, Politicians, Social Security, Taxes
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. sam says:

    Social Security is not the problem. (See, Kevin Drum, Understanding Social Security in One Easy Lesson). Medicare and Medicaid are the real problems, and this, basically, because our health care system is messed up (fee-for-service model). Those two programs are the chief domestic drivers of the deficit. All the cuts in discretionary spending now being trumpeted are just chaff on the budgetary hurricane winds generated by Medicare and Medicaid. Those programs have to be addressed. And I say this as someone who could quite possibly need Medicare in the near future. But this will be hard, hard, hard. No wonder nobody wants to step up to the plate.

  2. PD Shaw says:

    sam, that link says that SS is set to go from 4.5% of GDP to 6.0%. That’s the definition of sustainable? Is the 4.3% of GDP spent on defense sustainable, or is it a sacred cow that we must gain the political will to plunder to pay for the extra goodies the Democrats just gave the country in healthcare?

    Snark aside, I agree we need healthcare reform.

  3. sam says:

    I hope everybody finds this as amusing as I did, from National Review Online, Republicans Take On the Budget:

    Score another victory for the Tea Party.

    As of Monday early afternoon, House Republicans were officially undecided as to whether they’d take on entitlements when they write the budget this year. Fiscal-hawk extraordinaire Paul Ryan, the chairman of the House Budget Committee, danced around the issue in a meeting with reporters. After trashing Obama’s budget for its failure to include entitlement reform, Ryan refused to say whether he’d include it in his own. Little did he know that just as he was reluctantly deflecting the question, House majority leader Eric Cantor was dropping a bombshell in a pen-and-pad briefing with reporters elsewhere in the Capitol: Republicans, Cantor said, are all-in on entitlement reform…

    Sources say Ryan was “thrilled” when he heard about Cantor’s remarks.

    Well, you know, there’s being thrilled and then there’s being drilled. I suspect Ryan, who’s a cautious man, felt more drilled than thrilled.

  4. Loviatar says:

    I’m going to quote John Cole’s whole post since he says it so nicely.

    I’ve said this before, and I will say it again. Unless your proposal includes a substantial increase in taxes and a substantial amount of cuts to the military budget as well as ending the farm subsidies and giveaways to big oil and big energy and big business, you can kindly just shut up about the deficit and the debt. Additionally, any cuts to entitlements need to include cuts to the CURRENT recipients, not grandfathering the boomers and then wondering why the cuts never materialize in the future.

    If you aren’t going to do those things, just shut up. You aren’t serious.

    So Doug are you serious or are you just another RepublicanLibertarian Independent deficit poser – I’m sorry what type of poseur are you again?

  5. john personna says:

    I can see how it works as a lazy blog cycle to blame Obama for this budget impasse (and impasse is what it is). It works every day. Rinse, lather, repeat.

    But we know that Obama can’t be the first-mover, and that if he were, no one would follow.

    We have a societal problem here. A free lunch syndrome. No one, in politics or media, is proposing a workable solution. Your efforts would be better spent on that … if you are actually trying to achieve any budgetary progress.

    If you just want blog traffic today and tomorrow, I guess you already have your plan.

  6. sam says:

    “sam, that link says that SS is set to go from 4.5% of GDP to 6.0%. That’s the definition of sustainable?”

    I don’t think that’s unsustainable. If we get the other stuff under control, that is. If not, then it’s no more sustainable than the DOD budget.

  7. Loviatar says:

    Also, E.D. Kain does a good job taking to task all of you supposed Fiscal Conservatives, I particularly like his take down of Andrew Sullivan

    I do not think that word means what you think it means.

    Is inflation out of control? No, not even close. Are our creditors closing our accounts? No, because our creditors know that all we need to do to pay them off is raise taxes or get out of this recession. When growth picks back up deficits will shrink. The deficit is not a problem in the first place. The whole thing is just a ruse.

    Meanwhile, unemployment remains sky-high and so do corporate profits. Everything is rosy except for the American worker, and to them fiscal conservatives and pundits like Sullivan say “Austerity Now” like some grotesque mimicry of that Seinfeld episode. All the hand-wringing over structural unemployment and so forth is just cover for supply-side nonsense that’s captured the American psyche from pundit and politician on down. What we are witnessing is a balance-sheet recession and a crisis of demand. Or at least that’s what all the evidence and data points to.

    But it’s easier for people who do not have to cash an unemployment check or who will never rely on Social Security to say that what we need now is actually entitlement reform, austerity, and – of course – more tax cuts for corporations and the wealthiest Americans. And we need to stop handing out those unemployment checks too, because why would anyone work if they could just collect a couple hundred bucks free of charge? This is fiscal conservatism. No tax increases allowed. At least Sullivan argues for those (which is enough to write him out of most conservative circles) but for the life of me, I can’t recall ever reading anything he’s written that clearly explains why he’s a fiscal conservative to begin with and, just as importantly, why he thinks now is the appropriate time for us to cut spending and raise the retirement age, or focus on the deficit rather than on jobs.

    Go take a look, its a great read.

  8. Moosebreath says:

    “We need to deal with this issue like adults. That means talking about things like lowering benefits, increasing the retirement age, means testing, and, yes, some form of privatization.”

    Dealing with an issue like adults does not mean doing everything you like, Doug. You left off several major categories of things to be done, including the one well designed to create screaming horrors in all Republicans and libertarians — raising taxes.

  9. MarkedMan says:

    “sam, that link says that SS is set to go from 4.5% of GDP to 6.0%. That’s the definition of sustainable?”

    So over the course of the next several decades the percentage of our population who is retired will increase and therefore the percentage of the economy supporting them goes up. What did you think was going to happen?

  10. Wayne says:

    Obama is a cheerleader in chief. He doesn’t know how to lead. Like any crisis so far he will set back a see where the crowd goes then try to jump in front. The Democrats are not any better. They like to set on their hands during a crisis then complain and nitpick when anyone else does anything.

    I agree the Democrats believe that this will work to their advantage. However IMO I think it will backfire on them. People are becoming more aware of their little games. They hear Democrats saying one thing then doing another. For example we need to cut spending then propose even more spending. The let us kick the can further down the road is no longer going to work. Times are a changing but the inside of the beltway people haven’t realized it yet.

  11. steve says:

    I think this is political gamesmanship. The GOP won the recent election with a mandate to cut spending. They have to make proposals that do so. They are quite happy to make popular tax cut proposals. Now we will see if they are willing to make the less popular proposals for cuts. The key will be Obama’s response. The GOP can make proposals that will favor the rich, or ones that Obama can support.

    Steve

  12. Gustopher says:

    “that link says that SS is set to go from 4.5% of GDP to 6.0%. That’s the definition of sustainable?”

    Well, that’s why Social Security has been running a surplus for the last few decades — to get over that hump. That surplus has been invested in treasury notes — not worthless IOUs, but the very same treasury notes backed by the full faith and credit of the United States that investors have been buying up to finance our debt.

    We don’t have a Social Security crisis, we have a “Republicans don’t want to honor treasury notes” crisis.

  13. PD Shaw says:

    Gustopher, I voted for the guy who wanted to put that “surplus” in a lock box, but he was defeated. It’s still there anyway right?

  14. ponce says:

    The Republicans are the ones who stirred up the faux frenzy about the deficit.

    It’s their problem to solve.

  15. MarkedMan says:

    “Gustopher, I voted for the guy who wanted to put that “surplus” in a lock box, but he was defeated. It’s still there anyway right?”

    Yes. It is still there. It is invested in the same US treasuries the Chinese are invested in, and essentially the same ones my parents send their grandkids at birthday time. The only real concern is that there are some sitting congress critters, exclusively Republicans as far as I know, that are saying we should pay off all those treasury bills except for the ones held by the seniors.

  16. Brummagem Joe says:

    “We need to deal with this issue like adults.”

    Doug: you mean like the Republicans have been behaving like adults for the past two years? The Republicans have done a lot of shouting about their cuts, well lets see what they propose.
    It’s fairly obvious to most of the country that the adult in the room is the president I’d say. To start with SS is not a big problem. It can be fixed quite easily with some minor tweaks like rasing the retirement age and FICA caps, and in any case it’s not even technically insolvent for another 26 years. With M/M the problem is not access to medical care it’s the cost of providing and funding it. All our peers have universal healthcare systems that cost half what ours does and yet whenever any attempt is made by the Democrats to attack costs the Republicans block it. Exhibit A being advantage plans and Exhibit B being negotiating price breaks on drug purchases. Two months ago their great concern with the deficit was so immense tthat they insisted on adding $700 billion to it by allowing tax cuts for the wealthiest to be extended. When the Republicans actually start behaving like adults on these issues maybe they’ll be treated like adults.

  17. Brummagem Joe says:

    “Democrats are likely to portray whatever the GOP produces as the Son of Privatization, and Sen. Charles Schumer (D-N.Y.) previewed that strategy Tuesday night, saying the Republicans’ “idea of entitlement reform will be privatizing Social Security and turning Medicare into a voucher system.”

    BTW this is the Republican plan, or aren’t you familiar with the widely praised, by conservatives, Paul Ryan road map?

  18. Brummagem Joe says:

    “Partly, this is because most Americans seem adverse to having discussions with their doctors and loved ones about end-of-life care before its too late,”

    Doug when the Democrats suggested funding some very sensible help for people close to death as part of the ACA the Republicans immediately started screaming death panels…this is what you call being adult is it?

  19. Jedidiah says:

    Aren’t we getting tired of the name calling socialism, death panels, communism! I thought we were moving past this.

  20. ponce says:

    “BTW this is the Republican plan, or aren’t you familiar with the widely praised, by conservatives, Paul Ryan road map?”

    The rewards are so massive if Wall Street can get its hands on Social Security (greater than the entire value of the NYSE and NASDAQ combined) that it makes sense for them to order their lackeys in the Republican Party to push for it as often as possible.

    If it gets shot down and they’re voted out of office, Wall Street can always buy another cadre of willing Republicans.

  21. Pete says:

    Loviator, like all mental midgets before you, you use supply side straw man to justify your ignorance. I know you are impressed with your own words, but you are deluded.

  22. ratufa says:

    We just had an election where Republicans gained a lot of seats, in part because seniors turned out in large numbers and voted for Republicans by a large majority. I suspect that part of the advantage among seniors came from attacks on Obama/Reid/Pelosi for raiding Medicare (I saw many commercials during the campaign that made such attacks).

    So, I’m not sure why Democrats should be eager to jump under that particular bus, again. Is there any evidence that Republicans would treat a serious entitlement reform proposal from Obama any better than they treated the proposal from the deficit reduction commission or the Ryan plan (which most Republicans are trying to walk away from)?

    But, who knows, maybe there will soon be a joint news conference where Obama proposes Medicare cuts and John Boehner proposes tax increases. And, then they’ll sing “Kumbayah” together. Until that happens, I’d expect politics to continue to rear its messy, nasty head until the possibility of electoral suicide via voter rage becomes less scary than the pressure from interest groups to fix our budget problems.

  23. michael reynolds says:

    I wish Obama had stepped up. But do I understand why he would play it this way? Oh, absolutely.

    1) Since Reagan the GOP has promoted the lie that government was the problem, and painted a phony picture of Americans as some bunch of 18th century farmers.

    2) Simultaneously the GOP has pushed the lie that cutting taxes actually raised government revenues, that tax cuts were self-financing.

    3) The GOP has repeatedly run on cutting deficits, and then raised deficit spending.

    And because the American people are imbeciles the GOP has won numerous elections on the basis of these lies.

    Had the GOP not spent the last 30 years deliberately lying to the American people in order to gain power, we wouldn’t be where we are today.

    The fact is the American people need government. They are not 18th century farmers, they are city-dwellers and suburbanites heavily involved in a very complex economy and society and they need government.

    Which, surprise! means they have to pay for government.

    Which means, yes, actually paying, with actual money, for things they actually need.

    And now the GOP wants the Democrats — you know, the dumbasses who’ve been telling the truth about the above and thus losing elections — to rush to the fore so GOP lies can once again be deployed for political advantage?

    Hah!

    Here’s a starting point for the GOP: stop lying. Then we can move forwward.

  24. superdestroyer says:

    The Democrats want to add a trillion dollars in new taxes yet still talk about growing the economy and ending the recession. Why would anyone invest a single dollar in the U.S. knowing that when the Democrats eventually become the one dominate party that those same Democrats will tax the profits from the investment away.

    If the government raises taxes, the politicains will just find ways to spend it and be back for more. High tax states have the same or worse budget problems as low tax states.

    It is amazing that the Democrats demand cuts in spending while promoting open borders, unlimited immigration, new entitlements, and new regulatory schemes.

  25. Brummagem Joe says:

    superdestroyer says:
    Thursday, February 17, 2011 at 05:55
    “The Democrats want to add a trillion dollars in new taxes yet still talk about growing the economy and ending the recession. Why would anyone invest a single dollar in the U.S.”

    Quite a lot of people actually which is why both long and short dated T bills are at close to record low yields.

  26. Brummagem Joe says:

    Having posted a couple of wonkish responses to this yesterday I re-read it this morning and decided that I was taking it way too seriously. Laughter is the only proper response to Doug’s curious mixture of whining, distortions, unreality and unconscious irony.

  27. superdestroyer says:

    T-bills are at record lows because the return of virtually all investments is so low. Have you looked at the interest rates on bank accounts lately? Have you seen what is happening in the tax exempt bond market?

    Please tell me the massive new investment and new business that are being started. As I drive pass the office buildings where everyone has a space available sign and drive by the half empty strip malls and the empty industrial parks and the see through office buildings, it is really hard to see that anyone really wants to invest in anything in the private sector in the U. S.

    Deficit spending today is just higher taxes tomorrow. Massive budget deficits means massive tax increases in the future. Add in new health care, energy, transportation, and workplace regulations and the smartest play seems to be to invest outside the U.S.

  28. sam says:

    “T-bills are at record lows because the return of virtually all investments is so low”

    The T-bill situation is a little murkier, I think. See, Jitters over China’s waning taste for T-bills.

    It’s not clear why China’s purchase of T-bills is down (and in fact, may not be). On the other hand, the UK’s purchase has “surged” acc to the story.

  29. Brummagem Joe says:

    superdestroyer says:
    Thursday, February 17, 2011 at 08:20
    T-bills are at record lows because the return of virtually all investments is so low. Have you looked at the interest rates on bank accounts lately?

    Er….bank account interest rates are largely driven by T bill rates. Duh. On the other hand if you’d invested in an equity index fund in late spring ’08 you’d have garnered a nearly 100% increase in your investment. Sheesh the US educational system has a lot to answer for.

  30. Brummagem Joe says:

    Correction…late spring “09 of course.