Posts Tagged ‘entitlement spending’

12
Jul

Senator Obama Was Right

   Posted by: Pat    in Budget/Economy, Congress, entitlements, health care   Print Print

Senator Barack Obama, March, 2006:

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” he said. “It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”

Senator Obama was right. Too bad, he’s now the President and appears to have not meant a word of that statement above. Too bad for all of us. President Obama has tried to portray himself as the adult in this debt ceiling debate, but when it comes to taking care of our nation’s fiscal well being his administration has made a drunk teenager in love look responsible and mature. Just months ago he released a budget so unserious that his own party and the entire Senate disowned it 97-0. He came into office to lead a country facing massive debt and managed to make the situation even worse as our debt has sky rocketed in the past 3 years. He not only has failed to do anything to rectify our coming entitlement crisis, he has actually made them even worse by passing a new health care entitlement and vilifying anyone who is willing to address Medicare, Social Security, and Medicaid, all of which are facing major funding shortages.  Barack Obama is many things, a good leader, he is not.

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13
May

Top 5 Articles of the Week

   Posted by: Pat    in Budget/Economy, health care, Middle East, Top Articles   Print Print

Let’s dig in, shall we!

1. ‘Obama’s Immigration Reform Vision: Clouded by Cynicism, Mark Salter, Real Clear Politics

President Obama decries ‘politics’, regarding our nation’s immigration policy debate, in a purely political speech without any substance or chance of leading to actual reform:

Obama has never been serious about passing immigration reform. But he has been very adroit at using the unresolved issue to advance his own political interests.

In 2005, Sens. Edward M. Kennedy and John McCain sponsored comprehensive legislation that would have made substantial improvements to border security, establish a guest-worker program, and give the 12 to 20 million immigrants now living here illegally a path to citizenship….

A bipartisan group of senators supporting the bill formed an informal caucus to help guide it successfully through Senate debate. They met every morning in a room just off the Senate chamber to discuss plans for defending the bill from amendments that would reduce its chances of passage. Then-Sen. Barack Obama asked to join in those discussions.

As an aide to McCain, I was in the room for every one of those meetings. It was my first opportunity to observe Obama closely. During those meetings, I never saw him engage in any discussion concerned with building a majority vote in favor of the legislation. In the meetings he attended, he would draw from his shirt pocket a 3×5 index card, on which he had written changes he insisted be made to the bill before he would support it. They were invariably the same demands made by the AFL-CIO, which was intent on watering down or killing the guest-worker provisions. Republicans and Democrats alike were irritated by his transparently self-interested behavior, but tried to negotiate with him. He remained adamant in his positions and unwilling to compromise.

2. ‘Syria: The Class Clash‘, Walter Raubeson, Foreign Policy Association

A colleague of mine who spent the last two years in Damascus has been covering the uprisings in Syria since they started. This particular piece discusses the role of classes in the current insurrection.

The ongoing coverage of the Syrian uprising has focused, mostly, on issues of sect, ethnicity, and political affiliation. “This is a sectarian issue! Sunnis vs Alawites vs Christians!!!” Or maybe…”It’s about Kurds vs Arabs!!!” Another favorite is…”It’s about Authoritarianism vs Islamism vs Liberalism!!!” Newspapermen seem to like fights.

The one issue that seems to be getting thrown under the bus, and what might just be most important in the Syrian context, is the issue of class.

3. ‘Mitt Romney: Obama’s Running Mate, Wall Street Journal Editorial Board

The Wall Street Journal’s editorial board rips into Mitt Romney’s Massachusetts health care program, delivering what could be a devastating strike to his presidential aspirations:

“There’s a lot to learn from the failure of the ObamaCare model that began in Massachusetts, which is now moving to impose price controls on all hospitals, doctors and other providers. Not that anyone would know listening to Mr. Romney. In the paperback edition of his campaign book “No Apology,” he calls the plan a “success,” and he has defended it in numerous media appearances as he plans his White House run….

The only good news we can find is that the uninsured rate has dropped to 2% today from 6% in 2006. Yet four out of five of the newly insured receive low- or no-cost coverage from the government. The subsidies will cost at least $830 million in 2011 and are growing, conservatively measured, at 5.1% a year. Total state health-care spending as a share of the budget has grown from about 16% in the 1980s to 30% in 2006 to 40% today. The national state average is about 25%.

The safety-net fund that was supposed to be unwound, well, wasn’t. Uncompensated hospital care rose 5% from 2008 to 2009, and 15% from 2009 to 2010, hitting $475 million (though the state only paid out $405 million). “Avoidable” use of emergency rooms—that is, for routine care like a sore throat—increased 9% between 2004 and 2008. Meanwhile, unsubsidized insurance premiums for individuals and small businesses have climbed to among the highest in the nation.

Like Mr. Obama’s reform, RomneyCare was predicated on the illusion that insurance would be less expensive if everyone were covered. Even if this theory were plausible, it is not true in Massachusetts today….

More immediately for his Republican candidacy, the debate over ObamaCare and the larger entitlement state may be the central question of the 2012 election. On that question, Mr. Romney is compromised and not credible. If he does not change his message, he might as well try to knock off Joe Biden and get on the Obama ticket.”

4. ‘Obama owes thanks, and an apology, to CIA interrogators, Marc Thiessmen, Washington Post

Just today, Attorney General Eric Holder said that he has “made a lot of progress” on the investigation of former CIA interrogators. Remember, all of these CIA officers have already undergone a federal investigation in which they cleanly passed.

On his second day in office, Obama shut down the CIA’s high-value interrogation program. His Justice Department then reopened criminal investigations into the conduct of CIA interrogators — inquiries that had been closed years before by career prosecutors who concluded that there were no crimes to prosecute. In a speech at the National Archives, Obama eviscerated the men and women of the CIA, accusing them of “torture” and declaring that their work “did not advance our war and counterterrorism efforts — they undermined them.” Now, it turns out that the very CIA interrogators whose lives Obama turned upside down played a critical role in what the president rightly calls “the most significant achievement to date in our nation’s effort to defeat al Qaeda.”

It is time for a public apology.

5. ‘History Lessons for Obama and Other Liberals, George will, Washington Post

Will brings some welcome historical perspective to the entitlement program debate, among other topics.

Responding to Ryan’s budget proposal, Obama said it “would lead to a fundamentally different America than the one we’ve known certainly in my lifetime. In fact, I think it would be fundamentally different than what we’ve known throughout our history.”

Well. It is unclear what “fundamentally” means to Obama, but consider some possible metrics of what is, and is not, different than what we have known “throughout our history.” Ryan’s plan would reduce federal spending as a percentage of GDP from the 2009-11 average of 24.4 to 19.9 in 10 years. It was not until the nation was 158 years old — in the Depression year of 1934, with the New Deal erupting — that peacetime federal spending topped 10 percent of GDP, and it did not reach 12 percent until the war preparations of 1941.

Ryan’s plan would alter Medicare. But Medicare has existed in its current configuration for only 46 of the nation’s 235 years.

The hysteria and hyperbole about Ryan’s plan arise, in part, from a poverty of today’s liberal imagination, an inability to think beyond the straight-line continuation of programs from the second and third quarters of the last century. It is odd that “progressives,” as liberals now wish to be called, have such a constricted notion of the possibilities of progress.

Liberals think Medicare and Social Security as they exist are “fundamental” to the nation’s identity. But liberals think the Constitution — which the Framers meant to be fundamental, meaning constituting, law — should be construed as a “living” document, continually evolving to take different meanings under whatever liberals consider new social imperatives.

Please feel free to offer your own recommendations or thoughts on ours in the comments.

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This picture cost the Pentagon $25 million dollars

My blogging colleague FMFP’s recent writings on the ongoing struggle for the US government to agree on a budget for this coming year highlighted the discrepancy between mandatory (entitlement programs such as Social Security, Medicare, and Medicaid) and discretionary funding, basically everything else the government pays for, including defense spending. FMFP cited a poll that showed that far too many Americans are unaware of the fact that entitlement spending is what is really driving our country toward insolvency and another poll by WSJ/NBC also portrays an American populace unwilling to give up any ‘significant’ portion of these program’s benefits to fix the budget. FMFP, after using Tarrance Group poll results showing that a majority of Americans think the government spends more on defense than on entitlements, accurately pointed out defense/security procurements take up roughly 20% of the budget while Social Security and Medicare take up almost twice as much and are expected to explode in coming decades.

It is this context, that I recently read Robert Kagan’s article ‘The Price of Power‘. Here’s his intro:

The looming battle over the defense budget could produce a useful national discussion about American foreign and defense policy. But we would need to begin by dispensing with the most commonly repeated fallacy: that cutting defense is essential to restoring the nation’s fiscal health. People can be forgiven for believing this myth, given how often they hear it. Typical is a recent Foreign Affairs article claiming that the United States faces “a watershed moment” and “must decide whether to increase its already massive debt in order to continue being the world’s sheriff or restrain its military missions and focus on economic recovery.”

This is nonsense. No serious budget analyst or economist believes that cutting the defense budget will aid economic recovery in the near term—federal spending on defense is just as much a job-producing stimulus as federal spending on infrastructure. Nor, more importantly, do they believe that cutting defense spending will have more than the most marginal effect on reducing the runaway deficits projected for the coming years. The simple fact is, as my Brookings colleague and former budget czar Alice Rivlin recently observed, the scary projections of future deficits are not “caused by rising defense spending,” and even if one assumes that defense spending continues to increase with the rate of inflation, this is “not what’s driving the future spending.” The engine of our growing debt is entitlements.

Kagan is a strong believer in the US global military presence being a source of public good not only for the United States, but also for the world in general. His position on defense cuts is unsurprising, but nonetheless, persuasive. He later in the lengthy article details the main reasons to keep a strong, active US military, with global terrorism and rising great power instability as the key two reasons. Kagan also warns against the assumption that substantial cuts to the defense arena will be without much cost…

In fact, the only way to get significant savings from the defense budget—and by “significant,” we are still talking about a tiny fraction of the cuts needed to bring down future deficits—is to cut force structure: fewer troops on the ground; fewer airplanes in the skies; fewer ships in the water; fewer soldiers, pilots, and sailors to feed and clothe and provide benefits for. To cut the size of the force, however, requires reducing or eliminating the missions those forces have been performing.

In other words, if the US really wants to cut down on our defense spending we are going to have to change or adjust our strategic posture. To some, specifically Jeffersonians and domestic liberals, a smaller US military would be overall beneficial: more money for social programs/less military adventures abroad. For others, a lessening of our international presence will lead us and the world down a potentially dangerous path (great power war, global instability) that will cost us much more than 20% of our budget to get out from under.

I have to admit, though I’m clearly in the ‘US military and global presence is a source for good’ camp, I have to admit that our modern defense industry is bloated and could use some trimming. Greg Scoblete of Real Clear World rightly points out that overall the US currently finds itself in more sure security surroundings compared to the Cold War, WW II, etc. I believe the US needs a strong presence in East Asia to combat a growing China and keep allies such as Japan, Indonesia, and South Korea secure. The scourge of Islamic terrorism is as real as ever and demands a secure homeland and strong military, diplomatic, and intelligence network in numerous hot spots around the globe to deter and defeat. Global trade, which still depends largely on maritime travel, demands safe passage through the earth’s oceans and seas and there is no better guarantor of that than the US Navy. The Middle East, which includes a menacing regime in Tehran, a Turkey posturing away from the West, a vulnerable ally in Israel, oil supplies and pathways up the wazoo, is cauldron of instability and no one knows where these popular uprisings may lead. I could go on…

So in short, yes, I do think the United States could sustain some cuts in our defense spending, but we have to admit that this will come with some costs. which we must choose wisely. and we must not let these cuts distract us from our real budget calamity, ever expanding entitlement programs. This country and the world need a strong American presence and for this to be maintained now and in the future we need not only a capable military, but a fiscal future that doesn’t look so much like present day Greece.

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2
Mar

Budget Politics: Defense vs. Entitlement Spending

   Posted by: FMFP    in Budget/Economy   Print Print

As I wrote yesterday, the Continuing Resolution (CR) likely to arrive at the President’s desk today or tomorrow will grant the government a two week reprieve from what many people were preparing for – a government shutdown. Rightly criticized for simply kicking the can down the road, I’m curious to see what will happen in two weeks considering the broader divide between the Senate Democrats and House Republicans has not really been addressed. In fact, all sides knew this deadline was coming since the 111th Congress passed their CR back in December. So passing this two week CR doesn’t exactly inspire confidence that an agreement to fund the government through September is imminent.

Like many major budget battles, much of the dispute (and ultimately, the resolution) resides in the varying effectiveness of each side’s public relations effort. The Republicans’ position is that America’s high debt and stagnant economy are symptoms of the larger problem – a government that is bloated and spending at unsustainable levels. Therefore, we need to cut the size of government starting with discretionary spending (as opposed to entitlement spending that is considered mandatory). The Republicans claim these cuts are both a down payment on further spending reforms to come and a fulfillment of their campaign promise to rein in our debt (roughly $14.3 trillion) and deficit (projected at $1.6 trillion for 2011).

The Democrats’ position is that our economy is fragile right now and any major cuts like the ones proposed by the Republicans will deflate our current recovery (see yesterday’s reference to Goldman Sachs and Moody’s analysis claiming a loss of 700,000 jobs if Republicans plans to cut $61 billion are adopted). In a nutshell, their argument is that now is not the right time for cuts (without necessarily stipulating that cuts in the future are altogether necessary).

So who’s right and perhaps more importantly for our current discussion, who is winning the public relations battle? Well that’s obviously a complicated question but it just might be the Democrats. On one hand, we see a sustained interest among the public in reining in government spending – cutting the Republicans’ direction.

But on the other hand, we see a real misunderstanding among the public over the composition of government outlays (spending in real people language). For instance, a recent poll released by Tarrance Group shows:

“A majority of voters incorrectly believes the federal government spends more on defense/foreign aid than it does on Medicare and Social Security (63%). Also, a similar majority (60%) incorrectly believes problems with the federal budget can be fixed by just eliminating waste, fraud and abuse. Voters do not casually agree with these untruths- at least 40% strongly agree. Further, less than half (44%) believe Medicare and Social Security costs are a major source of problems for the federal budget (49% disagree).”

These numbers should hearten Democrats because they cut against (factually correct) claims made by Republicans that 1) entitlements/mandatory spending remains the biggest budgetary problem and 2) spending on non-defense discretionary programs (where most of the stimulus dollars were allocated) is also out of control. I’ll back up the assertions just made in a second, but first one more point for the Democrats. The poll demonstrates the prevalence of a long-standing liberal position among the public. Specifically, the claim that defense spending is at least as much – or more, depending how liberal you lean – to blame as entitlements for our budget problems.

Now for the facts. Discretionary spending – including defense – is roughly 1/3 of the federal budget. The other 2/3? You guessed it – mandatory spending, made up primarily of the big three: Social Security, Medicare and Medicaid.

Even if we were to take the poll’s findings head on, we would still find the public’s beliefs dubious. Defense/security spending equals roughly 20% of the federal budget. Social Security and Medicare? Roughly 35%. And even scarier, mandatory spending is growing nearly five times the pace of discretionary spending. So it’s really not even a close call. (Btw, I used a liberal-leaning think tank for these numbers in case you were wondering – the Center on Budget and Policy Priorities).

Since I’m trying to keep these posts at a manageable length (and not really succeeding), I’ll close with my main points. The Democrats seem to be in a strong position if they can sell their position that the real problem is defense spending and the fragile economic recovery is dependent on maintaining government’s current level of support.

Meanwhile, Republicans have a long road uphill to educate the average American on the serious budget problems facing the country and the relatively minor impact the discretionary cuts they’re proposing will have on the economy. Ultimately, they need to convince Americans that the problem lies not just in eliminating waste, fraud and abuse, but rather setting priorities on what we can afford as opposed to what we would like to be able to pay for.

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