In February, Defense secretary Robert Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, sounded a cautionary note at a congressional hearing on the defense budget. "We shrink from our global security responsibilities at our peril," Gates warned members of Congress. "Retrenchment brought about by short-sighted cuts could well lead to costlier and more tragic consequences later, indeed, as they always have in the past."
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.
As Republicans contemplate what sort of budget they should propose (real budget solutions, not continuing resolutions), it's important to realize that they are in a somewhat enviable position: What is clearly best for the country is also likely best for them politically.
Social Security’s looming deficit can be handled, for the time being, by adjusting benefits a tad downward. Medicaid’s runaway spending can be restrained by giving state governors more flexibility in administering the program. These are modest solutions. Medicare is different. It needs a big solution.
Wisconsin Republican congressman Paul Ryan, likely the next chair of the House Budget Committee, was on CNBC's Squawk Box this morning. Ryan said the United States needs "low tax rates," "sound and honest money," "regulations that are fair, predictable, transparent, [and] reasonable," and to "cut spending." Watch the video:
Yesterday the Senate voted 85-13 for John McCain's anti-VAT resolution. The lack of any substantial support for a VAT in the Senate would suggest that, even if the president's fiscal commission recommends such a tax when it reports in December, Ross Douthat is right and the chances a VAT will be imposed prior to the fiscal crisis are small. Whew.
Some additional context for today's bill signing. (See Fred Barnes's excellent post on Medicare, here.) Today, Barack Obama signed into law a new entitlement that, he says, will not only provide much-needed benefits to the American people but will put the country on a path to long-term fiscal stability:
And in fact, it is through these reforms that we achieve the biggest reduction in our long-term deficits since the Balanced Budget Act of the 1990s. So for all those folks out there who are talking about being fiscal hawks and didn’t do much when they were in power let’s just remind them that according to the Congressional Budget Office, this represents over a trillion dollars of deficit reduction that is being done in a smart way.