Dark Age budgeting: Social Security back on the table
There was once a time in the mid-2000s—a golden era, if you will—when it finally seemed widely recognized that long-run federal spending trends were driven near-entirely by rising health care costs. An equally important corollary recognition was that these health care costs were driven in turn near-entirely by rising per beneficiary cost-growth, a function of our dysfunctional health system and not a function of demographics. Lots of people deserve credit for getting this truth out, and Peter Orszag’s tenure at the Congressional Budget Office was especially useful in drumming this truth home to the Very Serious People™. Figures and bullet-points like this one seemed to help…
Recognizing that demographics alone do not constitute a coming budget crisis was hugely important, because it was (a) correct and (b) focused attention on where it belonged in budget issues: reforming health care. It also relieved pressure stemming from efforts to cut Social Security. This is crucially important because Social Security is the only leg of our retirement system that is not a frank disaster, so defanging efforts to chip away at it was a huge policy win.
But, the president’s inclusion of a Social Security benefit cut in his 2014 budget seems to have erased lots of this progress (in a similar context, Paul Krugman has noted that forgetting useful knowledge you once possessed constitutes “Dark Age” economics). And so, defenders of the president’s budget have fallen back on lazy clichés about how “SocialSecurityMedicareandMedicaid” are going to make spending skyrocket and cause a budget crisis.
A new extra twist has also been added to these clichés: progressives have painted themselves into a political corner wherein they now feel compelled to refuse any change in Social Security, Medicare or Medicaid (or other safety net programs) that will reduce costs.
I guess I can’t speak for “progressives” writ large, but this strikes me as wrong. Criticisms of the reductions in Medicare spending introduced in the Affordable Care Act, for example, have come overwhelmingly (somewhat hilariously) from the right. And to the degree that the ACA does get criticized from the left, it’s often because it left promising cost-controls on the table. To take one example—the inclusion of a public option in the ACA insurance exchanges has been scored by the CBO to save just about as much money over a decade as… the cut to Social Security called for in the president’s 2014 budget.
Tell me again why progressives are not “serious” about saving money in our social insurance programs but the president’s budget is?
Anyway, here’s my theory on why people have managed to forget well-earned budget deficit wisdom in recent years: we actually went a long way to solving the long-run budget/health care problem with the ACA. But if there’s no long-run budget ‘crisis’ to scream about to advertise your deep policy seriousness, how is one to maintain a reputation as a DC truth-teller? Might I suggest that if people really want to advertise their truth-telling credentials by drawing attention to scary long-run problems, they look here instead?