GOP Increases Deficit for Wars, Bank Bailouts and the Wealthy, But Cuts Medicare, Social Security and the Safety Net
GOP Plans to Demand Mandatory Cuts in Social Security, Medicare as Price for Debt Ceiling
It is increasingly clear that the Republicans will demand mandatory cuts in Social Security and Medicare as a price for increasing the debt ceiling later this spring.
Of course they won't say they are demanding mandatory cuts in Social Security and Medicare.
Over the Easter recess they've had a taste of just how strongly people feel about Medicare. Before they left the Capitol last month House Republicans voted - almost unanimously -- for the Republican budget that ends Medicare and replaces it with a privatized system of partial support for private insurance premiums. They ran into a town hall buzz-saw of opposition in every corner of the country.
The House Republican budget plan authored by Congressman Paul Ryan isn't going anywhere in the Senate.
If the "gang of six" Senators come up with a deficit reduction plan that is acceptable to its three Democrats and three Republicans, that may attract brief interest among the elite media. But such a budget deal would have to involve substantial increases in revenue - presumably from raising taxes on the wealthy - and that has exactly zero chance of being approved by the Republican House.
But the Republicans won't let the 70-plus percent opposition to cuts in Medicare and Social Security dissuade them. They've come up with a new plan that sugarcoats their attempts to eviscerate Social Security and Medicare. It's called a "mandatory global spending cap" and it's nothing more than the House Republican budget in disguise.
The Republicans like this plan because, when you ask everyday voters if they support a "mandatory global spending cap" they think it sounds pretty good. What better way to force the government to "live within its means"?
But support turns into solid opposition the moment people understand that the "mandatory global spending cap" would require mandatory cuts in Medicare and Social Security. In fact, this proposal isn't a way to make the government "live within its means" - it's really a way to cut Medicare and Social Security in order to give more tax breaks to millionaires. It's a way to reduce the "means" that normal people live on, and hand them over to the Donald Trumps and Paris Hiltons of the world.
Turns out that if you set a spending cap at a fixed level somewhere close to the average percentage of Gross Domestic Product that has gone to Federal outlays over the last couple of decades, it will inevitably force cuts in Medicare and Social Security. That's because the percentage of the population that is older and receiving Medicare and Social Security is going up. This will automatically increase the percentage of GDP going to Medicare and Social Security benefit - which, of course, Americans have paid for their entire working lives. In fact, the "mandatory global spending cap" is a trick intended to sucker ordinary people into supporting a proposal to cut their own Social Security and Medicare benefits.
But, you say, we may just have to renege on our commitments to pay Social Security and Medicare benefit because "we're broke" and the Federal deficit is soaring out of sight.
First, of course, we're not "broke." Big corporations and the wealthiest Americans are making more money - and a higher percentage of America's total income - than ever. The fact is that if millionaires and billionaires paid taxes at the same rate they did during the Reagan Administration - and the income they earn clipping coupons on investments were taxed at the same rates as people who work for a living - that would go a long way to eliminating the deficit.
And the experts tell us that Social Security would be solvent for 75 years if you required higher-income people to pay as much in Social Security taxes as their secretaries and janitors by eliminating the cap on income for which Americans pay Social Security taxes.
But if Moderate Democrats in the Senate need to support some deficit reducing measure at the same time they vote to raise the debt ceiling, there is actually also an elegant way to require that the Government eliminate its deficits that does not require mandatory cuts in Social Security and Medicare.
Instead of a "mandatory spending cap" you could pass a "mandatory deficit cap." This would require Congress to agree on a gradually-lower year-by-year dollar target for the deficit over the next ten years. Congress could achieve this target through any means - from raising taxes on the rich, to cutting spending, to eliminating tax expenditures like subsidies to oil companies. If it failed to do so that would trigger automatic reductions in spending - and tax expenditures. Social Security and Medicare would be excluded, since the benefits paid by these programs have been earned and paid for during people's working lives. The same would be true for the small percentage of Federal expenditures going to low-income programs that provide the critical social safety net.
That kind of "deficit trigger" is similar to -- though not exactly like -- the one proposed by President Obama in his budget speech. It would provide the discipline to force Congress to cut deficits over the next decade, without requiring cuts in Social Security and Medicare. It would also allow moderate Democrats in the Senate to support action that is responsive to voter concern about the deficit that doesn't run a foul of their rock-solid support for Social Security and Medicare.
Of course the problem with this proposal from the Republican point of view is that it actually addresses the deficit - and forces Congress to choose between tax breaks for the rich on the one hand, and Social Security and Medicare on the other. Since three-fourths of the voters choose cutting tax breaks for the rich, the Wall Street/CEO faction of the Republican Party (the dominate faction of the GOP) is not so wild about this approach. In fact, of course they don't really care about the "deficit." All they really care about are more and more tax breaks for themselves. They were perfectly happy, for instance, to massively increase the deficit last fall in order to continue the Bush tax breaks for the wealthy.
On the other hand, the Wall Street/CEO faction of the Republican Party is not about to allow the Tea Party gang to default on the Federal Debt and precipitate another financial market meltdown.
That's why, if Democrats frame the choice as a "global spending cap that will mandate cuts in Medicare and Social Security" versus a "deficit trigger" that will protect Social Security, Medicare and the social safety net - but also get the Federal Deficit under control - Democrats win.
But it's up to Democrats to affirmatively frame the debate in the upcoming budget battle. And it's critical that moderate Senate Democrats do not allow themselves to be stampeded into knee jerk positions that look good at first blush, but on closer inspection have horrific implications for their constituents on the one hand, and turn out to be politically unpopular on the other.