Monday, January 03, 2011

Disingenuousness on Social Security

Last week, Michael Gerson reliably served up a heaping serving of bad advice for the President, layered upon a number of self-contradictory and disingenuous notions about government.

First, Gerson suggests that Congress wasn't working when the House and Senate were passing difficult, contentious, complex legislation into law, but that the massive buy-off of the Republicans during the lame duck session somehow proves that Congress works just fine, thank you very much:
The American political system, it turns out, was not broken - just poorly used for nearly two years.
Okay, Michael, can you describe for us a few things that Congress needs to fix over the next few years - major issues that need to be addressed?
Only two proposals under discussion would reshape the American economic debate as well as the president's public image: reform of the tax code or reform of entitlements. Both are necessary, difficult and politically deceptive.
Great. Now that we know that Congress works, let's get to work on tax reform!
Overhauling the tax system seems the easier approach. It isn't. Most serious plans, including the options raised by the president's debt commission, would broaden the tax base, consolidate and lower rates, and eliminate most tax deductions and exemptions. But even a revenue-neutral tax overhaul would create a complicated system of winners and losers....

Republicans would have an easy time criticizing a thinly disguised tax increase for millions of Americans. It would seem like another Obama overreach that fundamentally changes the economy in frightening ways - confirming an image that the president desperately needs to change.
Michael, you appear to be saying that tax reform won't work because the Republican Party - your party - will lie and distort any reforms, no matter how necessary or appropriate, in order to harm the President. Eliminate a tax deduction, simplify the tax code, and have the Republicans shriek that "such and such group of people just had its taxes increased"? So we can't take on the issue at all? What astonishing support for your notion that the political system isn't broken.

So now that we know that our healthy political system can't take on tax reform, what about the other major issue you identified: entitlement reform?
Medicare is the main policy challenge here, because rising health costs are the primary cause of unsustainable entitlement commitments. But Medicare reform - the topic of intense, ideological debate - is a political nonstarter.
So let me get this straight, Michael: Having told us that the political system is functional, and having prioritized setting the nation's finances in order, the concept of cutting military spending couldn't squeak past your Republican lips? You've ruled out any meaningful tax reform? And tackling the most critical, most serious, most imminent entitlement issue is a "political nonstarter"? Wow... you have me convinced! It's a political utopia....

So having ruled out doing anything meaningful, Michael, what do you suggest that our functional Congress do? No, wait, don't tell me....
While Social Security is a relatively small contributor to future deficits, reforming it would be a large symbol and a logical place to begin.
Is it logical to start with a reform that will offer no appreciable economic benefit to the nation because that will somehow get things moving on the genuine, serious, pressing issues that Congress is apparently too functional to tackle? No, you don't make that argument. You don't in fact offer any argument as to why this "symbolic" reform would be a logical starting point. Dare I say, that's because the "logic" is derived from the idea that having a Democratic President do harm to a program that the Republicans have opposed since its inception, such that they can run against him by accusing him of slashing Social Security, is a Republican wet dream?

It's accurate to suggest that the same type of reforms that have historically successfully been passed to patch Social Security could again be passed, and that those ideas "could be written 'on the back of a napkin'". But please, Michael, show me the Republican bill that approaches Social Security with such simplicity and clarity. Why, given how easy this is, how functional Congress is, and the importance of this symbolic reform is to... well, you still haven't told us that part. Oh, that's right - if the Republicans propose a reform they won't be able to doom and gloom us about the pending "bankruptcy" of Social Security, nor will they be able to say that it's the Democrats who are taking food away from senior citizens.

Gerson offers up the standard Republican canard about the Social Security trust fund:
Obama's liberal base contends that the Social Security trust fund is not in immediate trouble. But this argument depends on an elaborate accounting trick. The trust fund is not filled with assets - gold bullion and Apple stock. It is filled with debt issued by the government to itself. The surpluses of the trust fund are in fact liabilities for the government as a whole. And these illusory surpluses are regularly used to subsidize the rest of the budget. The scheme begins to collapse in 2037, when promised benefits for Social Security recipients will suddenly drop by about 25 percent - unless the system is reformed.
Really, given how easily you can find accurate information about the Social Security trust fund, it's difficult to characterize the first part of Gerson's claim as anything but an outright lie - deliberately false fear mongering. As for the separate issue of a modest increase to Social Security taxes, modest changes to ages of eligibility, or some combination thereof, as Gerson indicates that's "back of a napkin" stuff. Even if we pretend that seniors receiving 75% of promised benefits more than twenty-five years from now is a looming crisis - something Gerson implicitly admits is ludicrous by declaring reforms to "fix" the problem to be "symbolic", it doesn't seem like much of a crisis.

Further, what's the "fix" supposed to be? To cut future benefits so that the "75%" represents the whole of what you're supposed to receive instead of a fraction? Unless he's holding back on ideas about privatization, that appears to be Gerson's concept of what "reform" would look like. The cure is the same as the disease?

Gerson then lectures the President that the "symbolic" reform of Social Security will help him win over "independents". This based upon... Gerson's word. Trust him, he's a Republican and all he wants to do is help a Democratic President stay in office. Right?
But Obama's urgent political need is to polish his image among i[]ndependents on spending and debt. And this won't happen by being risk averse.
But why should anybody believe that a reform that does not impact spending or debt in any concrete fashion will win a single vote from a bloc that is concerned about spending and debt? That is, if we are to pretend that spending and debt are priorities for voters, which Gerson just got through telling us is not the case - as evidenced by the fact that Congress can't address the two issues Gerson just told us are key to getting spending and debt under control, not to mention the military budget.

Here's another thing: While I understand the political advantage to the Republican Party in constantly yammering about a Social Security crisis, even if you can accept "Starting in 25 years, Social Security will only pay 75% of promised benefits" to be a crisis that demands immediate action, how can you take that type of projection seriously? Budget projections tend to assume that things will pretty much stay the same, and can't realistically anticipate wars and other crises, spikes in commodity pricing (think oil), economic bubbles, or other "unknowns". If a government program has a budget that appears balanced for the next twenty-five years it's ahead of what? Approximately all of the rest of them? Symbolism, nothing. Let's see Congress tackle a real problem.

Michael - the Republicans control the House and can pass whatever bills they want. Any chance that they will pass anything meaningful? Even a bill that they don't anticipate would pass in the Senate, "symbolically" reforming Social Security? Anything? (I notice that Gerson's byline is "Michael Gerson Michael Gerson" - it's as if even the Washington Post's server is tut-tutting his nonsense.)

Update: In order to balance the budget, given the options to raise taxes on the wealthy, cut defense spending, cut Medicare and cut Social Security, it looks like the American Public will support the tax increase by a healthy majority (61% support), will reject military cuts by a significant margin (20% support), and will oppose Medicare cuts (4% support) and Social Security cuts (3% support) by overwhelming margins. Again, trust Michael Gerson - he wants to help the President.

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