Samuelson's Home Run: 'What the Bowles-Simpson Plan Left Out'

The Washington Post's Robert J. Samuelson in his Monday column scolded President Obama's deficit commission in a fashion that should be must-reading for every American, especially liberal media members.

At issue for Samuelson wasn't the cost-saving or revenue-generating ideas in the plan. Instead, he accurately pointed out that it lacked a coherent message as to why our social programs are not a right to every American at birth, and that it is not immoral for government to withdraw or lessen benefits as it sees fit:

Modern democracies have created a new morality. Government benefits, once conferred, cannot be revoked. People expect them and consider them property rights. Just as government cannot randomly confiscate property, it cannot withdraw benefits without violating a moral code. The old-fashioned idea that government policies should serve the "national interest" has given way to inertia and squatters' rights.

One task of the National Commission on Fiscal Responsibility and Reform - co-chaired by Erskine Bowles and Alan Simpson - was to discredit this self-serving morality. Otherwise, changing the budget will be hard, maybe impossible. If everyone feels morally entitled to existing benefits and tax breaks, public opinion will remain hopelessly muddled: desirous in the abstract of curbing budget deficits but adamant about keeping all of Social Security, Medicare and everything else. Politicians will be scared to make tough decisions for fear of voter reprisals.

The Commission foolishly ducked this hard political challenge: to properly convey to those that have been raised in this entitlement environment the benefits they are or plan to receive are not a birthright bestowed upon them by our Founding Fathers that cannot be amended or withdrawn. Instead, what government gives its citizens beyond that specifically found in the Constitution - i.e defense for example - are bonuses distributed at the pleasure of that government.

When financial conditions or good common sense call for belt-tightening, citizens need to be mindful that their additional perks can be withdrawn or reduced for the greater good of the entire population:

It's not in the national interest to subsidize farmers, because food would be produced at low cost without subsidies. It's not in the national interest to subsidize Americans, through Social Security and Medicare, for the last 20 or 25 years of their lives because healthier people live longer and the huge costs make the budget unmanageable. It's not in the national interest to subsidize mass transit, because most benefits are enjoyed locally: If the locals want mass transit, they should pay for it.

Samuelson also went after the Commission for being too haphazard in dealing with defense and too soft in its treatment of senior benefits:

The biggest blunder of their approach involved huge proposed cuts in defense, about a fifth of federal spending. National security is government's first job. Bowles and Simpson reduced it proportionately with all other discretionary spending as if there's no difference between a dollar for defense and a dollar for art subsidies. Nor was there much effort to identify programs that should be eliminated because they fail the national need test. Good programs would have been cut along with the bad. Finally, spending on the elderly, now about two-fifths of the budget, was treated too gently. Social Security's full eligibility age would have increased slowly to 69 years around 2075. These programs are essential, but eligibility ages should be raised faster and, for wealthier recipients, benefits cut more.

Indeed, although something Samuelson should have more forcefully scolded the Commission for not recognizing national security as government's most important responsibility, and that it should therefore be viewed much differently in this discussion.

For years, the Left have pointed to defense spending as akin to entitlement programs demanding that any cuts in their pet projects must see similar reductions at the Pentagon. Samuelson accurately noted this foolish analogy, but ignored this as another opportunity for the Commission to set forth a new - or really, an old - paradigm for the role of government.

But Samuelson was right on when it came to Social Security and Medicare. The Commission foolishly touched this issue as if still the third rail by raising the retirement age by a scant one year in the next 40 years and two in the next 65.

Honest economists and mathematicians agree that the easiest way to reduce the trillions of dollars of unfunded liabilities associated with both of these entitlement programs is by changing the retirement age. This is something that should happen now and not in 40 years.

The solution is quite simple: folks born from 1960 through 1969 should immediately see the age in which they can receive maximum Social Security and Medicare benefits raised to 68. It is absurd to think those currently 41 to 50 years old can't adjust for either one more year of work before they retire or save enough to tide themselves over before benefits start if they choose to retire earlier.

Folks born in 1970 through 1979 should have their retirement age raised to 69. Everyone born in 1980 and after should have their retirement age raised to 70.

This seems particularly logical as Social Security was not initially intended to be one's exclusive retirement plan. It is just this kind of misconception prevalent in the society the Commission should have addressed to make the public aware of why it is morally acceptable for these changes to now be made: 

For years, it was assumed that a rapidly growing economy could pay for added programs. The result was the careless use of government for almost anything that made a good slogan or could support a lobby. The underlying economic assumptions were overly optimistic. Now, an aging society and uncontrolled health costs will automatically expand the size of government well beyond today's tax base. Demographics mean government will become supersized unless we trim its responsibilities.

We need a new public philosophy that acknowledges these realities. Perhaps Bowles-Simpson will start the needed conversation. Government will be big, offending conservatives. But it also should be limited, offending liberals.

Perhaps, but it seems unlikely, for liberal media members will never go along with with anything that could act to reduce benefits to the poor and/or the elderly. Such folks scoffed at the idea of raising the retirement age by a scant two years by 2075.

If the press aren't going to get on board minor changes like that, America hasn't a prayer at addressing the larger budget issues that face us in the coming years.

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Noel Sheppard's picture