Libertarian Leanings

Marines Over Medicaid

Reprinted with permission of the National Review. 

To the great surprise of nobody, another blue-ribbon panel of Washington’s A-list nabobs has failed at its task: In this case, it is the so-called supercommittee charged with nudging the federal government away from the edge of the debt abyss. Investors despaired at the news, and there was talk of a second downgrade of U.S. Treasury debt.

The failure of the supercommittee is a testament to Democrats’ tax obsession. With the supercommittee having fizzled, the next step is the automatic sequestration process, which imposes 50 percent of the cuts on a program that accounts for only 20 percent of spending (national defense) while leaving the entitlements largely untouched. But the country needs the Marines more than it needs Medicaid.

The talks broke down because Democrats demanded $1 trillion in tax increases as the price of doing any deal that included entitlement savings — which is to say, as the price of doing any deal that begins to address the major drivers of spending going forward. Republicans have never quite owned up to being open to a tax increase, but that is what they are talking about when they talk about “pro-growth tax reform,” which includes broadening the tax base and eliminating some deductions and exemptions, producing a net tax increase even if tax rates stay the same or go down. But even that isn’t good enough for the Democrats, who insist that any tax increase be enacted through a relatively narrow range of options, mostly through raising tax rates on individuals with above-average incomes and on businesses that do not fall within the protective circle of Democrats’ political favoritism. (Don’t expect General Electric or the next Solyndra to start paying 35 percent, whatever else happens.) Because Republicans rightly declined to go along with this class-warfare program and insisted upon savings in entitlements, the supercommittee failed.

The sobering thing is that even the massive tax increases the Democrats wish to inflict upon the nation would not close the deficit that our entitlement programs will produce if left unreformed. A study by the International Monetary Fund estimates that, in order to keep entitlement spending at current levels while stabilizing the debt, every federal tax on the books — income tax, payroll taxes, excise taxes, etc. — would have to be raised by 88 percent. Democrats will be happy to run against entitlement reform, and they will wallpaper the airwaves with vulgar advertisements that show Paul Ryan running granny off a cliff in her wheelchair. But they are really running on an 88 percent tax hike — that or massive, unsustainable deficits.

Voters are beginning to understand as much, and that means that Republicans have a two-fold task ahead of them: The first is to overturn the automatic defense-spending cuts, locating savings elsewhere in the federal budget to offset them. Unlike most of what the federal government does, national defense is a real, pressing, national priority that is unquestionably a government responsibility. The range of threats facing the United States is broad and deep, and a single 9/11-scale attack could in financial terms alone cost the nation far more than we would save through defense cutbacks, to say nothing of the loss of life. Defense is one of the few federal functions in which budgetary concerns must perforce take a backseat to global political realities.

The same is not true of the entitlement programs, and so the second part of the Republicans’ task is to take that case to the voters in November. Most of the Republican presidential hopefuls have developed thoughtful, credible, long-term solutions to the financial imbalances of Social Security, Medicare, and Medicaid. The reforms they are proposing — means testing, gradually raising the retirement age, changing the indexing formulae — are far short of the radical changes that have been contemplated by some on the right. But properly executed they would bring the programs back into balance, a goal that is of critical importance as our population ages and the financial stress on the entitlements becomes more acute. Changing the terms of Social Security for a well-off 35-year-old decades away from collecting any benefits is not relegating granny to a cat-food diet, and Republicans should be willing to make that case. 

Meanwhile, another opportunity to control spending and rationalize the tax code has come and gone. Our supply of such opportunities is not unlimited.

Quote of the Day

Not only have the Democrats in congress failed to produce budget, they've also unanimously rejected the one proposed by their leader, President Obama.  Ed Morrissey sums it up perfectly.

For a party that worked hard to barely retain control over the Senate, Democrats seem completely disinterested in meeting their responsibilities.  Who knew that Democrats would go on strike merely because the rabble had the temerity to strip them of control of one chamber of Congress?

Go rabble!

You Know They're Lying When...

We have unprecedented budget deficit and debt obligations facing America right now, that threaten our prosperity and even our national security, and we get demogoguery instead of solutions.  Here is a flavor of President Obama's answer to our problems:

Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.  Think about it.

I'm thinking about it, and I'm thinking this is not a serious man.  We simply don't have enough billionaires to go around.  If we take all of their money it won't get us out of the hole Obama dug in just three years.  We need economic growth from an expanded tax base, and Obama just wants more money for government.  We need this man out of the White House.  2012 can't come fast enough.

Progressives Arguing With Themselves

Paul Ryan's budget proposals have progressives contradicting their earlier claims, as Jennifer Rubin notes:

Critics might not like the idea that we will have to spend less on entitlements, but Obama has bought into the argument by cutting Medicare and empowering the Independent Payment Advisory Board to ”control costs,” which means to limit the amount spent on Medicare.

If critics want to insist that any cut in Medicare is unacceptable, they shouldn’t have cheered for Obamacare...

Can you make this stuff up?

As the administration unveiled details of a $3.4 trillion federal budget that is likely to triple the deficit in one year, President Obama had this to say:

"We can no longer afford to spend as if deficits don't matter and waste is not our problem," he said. "We can no longer afford to leave the hard choices for the next budget, the next administration -- or the next generation."

It simply boggles the mind.

Brave New World