The Magazine

Budget in the Balance

The GOP gambles on entitlement reform.

Apr 11, 2011, Vol. 16, No. 29 • By STEPHEN F. HAYES
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If there is one thing that political strategists, pollsters, and elected officials of both parties have agreed on for decades, it’s that entitlement reform is a sure political loser. Social Security is the “third rail”—touch it and you die. Suggest changes to Medicaid and you don’t care about the poor. Propose modest reforms to Medicare and you’re the target of a well-funded “Mediscare” campaign that ensures your defeat.

Marco Rubio

Newscom

No longer.

“People are getting it that these things are unsustainable,” says Karl Rove. “For so many people, debt is no longer abstract. It’s more concrete. I don’t know if it’s seeing Greece on TV or what. It’s still tough, but it’s not the political loser it used to be.”

Other influential Republicans go further. They believe that getting serious about entitlement reform can be politically advantageous. 

“I think it can be a real winner for Republicans if we handle it the right way,” says South Carolina senator Jim DeMint. 

Senator Marco Rubio, Republican of Florida, agrees. “I think that some in the Democratic party have made the calculated decision that they are hoping that some of us start talking about this so they can use this as a political tool against us. I think it will backfire.”

In a speech at the American Enterprise Institute, New Jersey governor Chris Christie said it was time for Republicans to “put up or shut up” on entitlement reforms and argued that tackling the problem—and treating voters as adults—would redound to their credit, just as his own blunt talk has caused his approval ratings in New Jersey to rise. “[I’m] more popular today than I was the day I was elected, and that’s in a state that is as Democratic as any state in America for a Republican governor.” 

Brad Todd, a GOP strategist who helped run Ron Johnson’s winning campaign for senator in Wisconsin and works with the National Republican Congressional Committee, says Republicans should be aware of the potential downsides of engaging on entitlement reform but warns that they may not be taken seriously if they fail to lead. “The calculus on entitlement reform has changed,” he says. “Republicans are taking some chances by making it an issue. But at the same time, it’s incredibly risky for Republicans not to engage on entitlement reform. It’s impossible for Republicans to succeed with independent voters without winning on spending issues. And it’s impossible for Republicans to win on spending issues without engaging on entitlements.”

So have things really changed? We’ll soon find out. 

On April 5 or 6, Representative Paul Ryan, chairman of the House Budget Committee, will present his 2012 budget proposal. The document will be far more than just a spreadsheet of the government’s revenues and expenditures. Ryan has put together a plan intended to serve as the blueprint for conservative governance for decades to come, with the ultimate goal of reversing the unbounded growth in the nation’s debt. His budget will include bold proposals on tax policy, significant reforms of discretionary spending (including caps), and a major overhaul of the entitlement programs that threaten to drive the United States into insolvency.

It will include target numbers for the funding of Medicare and Medicaid that will require major structural reforms of those programs. Ryan has chosen to leave reform of Social Security for another day, with the hope that President Obama will, at some point, want to join his crusade for broad entitlement reform. Although Ryan’s budget will not prescribe a single path to his objectives, instead leaving his colleagues free to fill in the details, Ryan’s views on health entitlement reform are well known. In his “Roadmap for America,” Ryan has argued that Medicaid should be block-granted to the states and Medicare should be transformed from a guaranteed benefit program to one that provides vouchers to individuals, enabling them to make health care purchases in the private market. 

The House Republican embrace of entitlement reform wasn’t inevitable. Ryan initially faced resistance from Republican leaders, who were understandably concerned that having their party own entitlement reform would leave them vulnerable to dema-goguery. But they permitted Ryan to conduct tutorials on the budget and entitlements with small groups of House freshmen over the past several months. By encouraging the most aggressive deficit hawks to join Ryan’s push for reform they were, in effect, recruiting for the other team. 

The turning point came when President Obama—after calling repeatedly for an “adult conversation” on entitlements—presented a budget proposal that failed to address the issue in any serious way. Obama was roundly criticized, and not just by Republicans. Editorial pages that are usually friendly to the president ripped his abdication of leadership. 

John Boehner, who had previously indicated an openness to entitlement reform, was angry that a president who had lectured Republicans thought he could get away with a transparently unserious approach to entitlements. In a February 13 appearance on Meet the Press, Boehner surprised even some members of his own caucus when he announced: “You’ll see our budget where, I’ve got to believe, we’re going to deal with the entitlement problem.” 

Not to be outdone, the following day Majority Leader Eric Cantor reiterated that call, promising that the GOP budget would be a “serious document that will reflect the type of path we feel we should be taking to address the fiscal situation, including addressing entitlement reforms, unlike the president did in his budget.” That evening, at a Republican whip meeting, the House majority whip, Kevin McCarthy, formally notified his caucus that the Republican budget would include entitlement reform. 

Senate Republicans, including Minority Leader Mitch McConnell and several other strong conservatives, are more cautious. Their argument is simple. Republicans only have a majority in the House, and real reform cannot happen unless the GOP wins the Senate and the White House in 2012. Getting specific on entitlement reforms now makes that less likely. 

“There’s more willingness on the House side,” says DeMint. “Paul Ryan has shown real leadership on the issue. He’s confident in what he believes, and he explains it well. Our leadership is much more reserved. They feel there is no need to get specific when the president isn’t specific with us. Some of us feel, individually if not as a conference, that in order to be credible with our budget numbers we have to include entitlement reform.”

It’s hard to overstate the significance of this moment. By including numbers in the budget that assume real reform, Republicans have obligated themselves to sell voters on a way to meet those objectives. Senators who prefer to keep their heads down and avoid specifics will find it increasingly difficult to do so as reporters ask whether they agree with Ryan’s targets and reforms. 

The same will be true of presi-dential candidates. Reporters will ask those questions, and so will voters. 

“I think Iowa Republicans are expecting to hear specifics from presidential candidates on entitlement reform,” says Matt Strawn, chairman of the Iowa Republican party and host of the first GOP presidential contest next winter. “Caucus-going Republicans are going to insist on seeing the details of entitlement reform proposals to see that you’re serious about tackling the largest fiscal issue facing this country. A strong message on that has to be part of a successful presidential campaign.”

Polling on the issue suggests that while most voters understand the problem, they remain divided on possible solutions. A Gallup poll from October illustrates the challenge. Asked whether the cost of major entitlements “will create major economic problems,” 77 percent of respondents said they would. Just 18 percent said no. But only 31 percent of those surveyed said the government should cut benefits to address the issue, while 66 percent said it shouldn’t. Similarly, 42 percent favored raising taxes and 56 percent were opposed.

A poll taken last month by Resurgent Republic, a Republican group, was slightly more encouraging but made clear the challenges Republicans face by taking on the issue. By 54 percent to 39 percent, voters agreed that elected officials should make benefit changes to Social Security now to preserve it for those 55 years old and under. But given a choice between Congressman A, who favors taking Social Security, Medicare, and Medicaid “off the table” to avoid “balancing the budget on the backs of our seniors and the poor,” and Congressman B, who says we cannot balance the budget without tackling those three programs because they take up more than half of all domestic spending, more voters sided with Congressman A—by 53 percent to 41 percent. (Independents agreed with Congressman A in roughly the same proportions.) 

If Republicans want to know how to talk about entitlement reform, their freshman senator from Florida provides a good model. In a debate on Fox News Sunday in March 2010, Marco Rubio explicitly endorsed the bold reforms in Paul Ryan’s “Roadmap,” including individual Social Security accounts for future retirees. He declared that he would be open to raising the retirement age and making cost-of-living adjustments to Social Security. 

“I think all of that has to be on the table, including the way we index increases in cost of living. All of these issues have to be on the table. They have to be options that I would be open to. They are included in the Ryan Roadmap. I think it’s the right approach to Social Security reform.”

Looking back, the senator says it’s clear that those issues didn’t hurt him. “The American people aren’t little kids. I think if you go to them and explain it in the right way—the American people almost always get it right at the end of the day in terms of how they look at issues,” he says. “I didn’t campaign on this in the Virgin Islands. I campaigned on this in Florida—in the state that perhaps leads the country in a per capita level of retirees. People understand this.”

Rubio won 49 percent of the vote in a three-way race despite his willingness to propose specific entitlement reforms—or perhaps because of it. Rubio campaign strategist Todd -Harris agrees. “Charlie Crist attacked us shamelessly on Social Security with millions in negative ads, but even after all that, our tracking showed that voters trusted Marco to protect Social Security more than Crist.” 

“In this environment voters are looking for authenticity and truth tellers,” Harris continues. “Straight talk about Social Security can actually work like a candidate character reference. Voters know if you are willing to tell them the hard truth about entitlements, they can probably believe you on everything else too, because no one lies about the easy stuff.”

Harris isn’t saying that every Republican should run on entitlement reform; he appreciates the risk. Rubio too says he understands the reluctance of some of his colleagues to go all-in on entitlement reform. But given the potential political upside of dealing with entitlements—and the certain economic ruin of failing to do so—Rubio believes the time to act is now. 

“What is politics about at the end of the day? Is this a sport or is this a job? If this is a sport, then all we should care about is winning the election. But this is a job. Our job is to solve problems.” 

He continues: “There’s no guarantees in any of this. All I can tell you is that if things continue the way they are, six years from now when I’m up for reelection and others in my class are up for reelection, I think we’re all going to be gone if we don’t begin to solve these problems, because the issue America will face by then will be unimaginable.”

Indeed.

Stephen F. Hayes is a senior writer at THE WEEKLY STANDARD.

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