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Dems Worrying Liberals With Talk of Entitlement Reform

Out of cash.

3:20 PM, Jul 13, 2010 • By MARY KATHARINE HAM
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I can't help but feel there may be hope for the nation yet when progressives start getting nervous about what Democrats are saying on entitlements.

Fred Barnes highlighted Obama's entitlement opportunity in a Wall Street Journal column yesterday, pointing out that Deficit Commission Chairs Democrat Erskine Bowles and former Republican Sen. Alan Simpson have both been entitlement reformers in the past:

Mr. Bowles, soon to retire as president of the University of North Carolina, was President Clinton's chief of staff when Mr. Clinton and House Speaker Newt Gingrich secretly agreed to a sweeping plan to reform both Social Security and Medicare. Mr. Clinton was to announce the broad outlines of the plan in his State of the Union address in January 2008. Mr. Gingrich would respond with favorable comments. Reform of Social Security would quickly be approved by Congress. Steps to control Medicare spending would be left to a presidential commission to figure out.

An intervening event killed the agreement. News of Mr. Clinton's trysts with Monica Lewinsky broke days before the State of the Union. The plan was immediately scuttled, never to be reactivated...

Mr. Simpson is a longtime proponent of restraining Social Security and Medicare spending, a fact Mr. Obama must have known when he named him co-chair. The appointment has infuriated liberal bloggers who frown on tinkering with Social Security.

I'm wary of ever getting too hopeful about the chances that Congress could actually tackle the entitlement spending crisis.  After all, they ignored about 60 percent of the public's opposition to pass a $2 trillion new entitlement this year. But, in the wake of that epically irresponsible move and the public's reaction to record deficits, even Democrats are making noise about some formerly untouchable programs.

House Maj. Leader Rep. Steny Hoyer suggested raising the retirement age was not out of the question in a speech in a June speech:

"We should consider a higher retirement age or one pegged to lifespan."

House Maj. Whip James Clyburn, when he's not accusing the GOP of funding Alvin Greene, is also talking about the retirement age:

"With minor changes to the program such as raising the salary cap and raising the retirement age by one month every year, the program could become solvent for the next 75 years," Clyburn's website says.

This didn't stop Dems from happily clobbering Republican Minority Leader John Boehner when he, too, suggested raiding the retirement age, so one step forward, two steps back.

But there's more. Former SEIU head and now member of the Deficit Commission Andy Stern last week suggested, to very little fanfare, that the government should invest Social Security funds in Wall Street to increase returns on them. My, it wasn't long ago that that sort of comment could get the whole of the Democratic caucus decrying your "risky scheme" to rob the Greatest Generation of their benefits. But times have changed:

There were several ways to bring the fund into balance, he said, but one that he favors consists of "investing some percentage of government money in the stock market, as they do in Canada. Not individual taxpayer money, but government money."

Let's lay aside the rather predictable fact that Andy Stern thinks "government money" is something that can exist independently of "individual taxpayer money." He's a labor liberal; of course he thinks the government will invest in the market better than you will, no matter how misguided that might be. But the fact that he's talking about investing in the market, and that this freaks out everyone at Democratic Underground, is a move in the direction of common sense:

Stern said that Canada's retirement system invests roughly 15 to 20 percent of its funds in the market, a range he thought reasonable. "There are lots of mechanisms for governments to be prudent investors," he said.

And, we come full circle with the president's hand-picked deficit guy speaking some truth to the nation's governors:

[Erskine] Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."...

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out. . . . The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."

Could there actually be a chance for Washington to rise above the old political bickering and reach across the aisle to come to solutions? Might they be able to discard the notions of red-state ideas and blue-state ideas, and simply embrace solutions that work, in their quest to make the touch choices? Improbably, Obama's unifiying rhetoric and bipartisan vision can now be applied more accurately to the formerly toxic idea of Social Security reform than it can to his own agenda. Hopenchange.

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