Just The Time For Entitlement Reform?

It was one comment over an hourlong interview, but "entitlements" is like catnip to Beltway journos, so that became the lede. Still, it's pretty troubling:

President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

In the same interview, Obama backed financial regulatory reform and endorsed a set of policies already put forward by Paul Volcker. In a way, he's much further ahead on that front than on this entitlements thing. As I said, catnip.

He also happened to say the right things about those specific entitlements. While I wasn't happy with his emphasis on Social Security in the primaries, it's important to remember that his SOLUTIONS were always progressive, like lifting the cap on payroll taxes from roughly $100,000 to something higher, and even adding a donut hole (so $100,000-$300,000 are exempt, and then incomes above that are subject to payroll taxes, which makes perfect sense).

"Social Security, we can solve," he said, waving his left hand. "The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system." [...]

The president-elect has been in frequent conversation with lawmakers, including House Majority Leader Steny H. Hoyer (D-Md.) and the Blue Dog Coalition of fiscally conservative Democrats, who repeatedly told Obama they would be willing to support his stimulus package only if he pledged not to lose sight of the larger budget picture. Those who will be invited to attend the summit include the Blue Dogs, Senate Budget Chairman Kent Conrad (N.D.), ranking minority member Judd Gregg (N.H.) and a host of outside groups with expertise on the topics, the president-elect said.

If this is some bargain for universal health care, with light, progressive tweaks to make Social Security more sustainable, then we're on solid ground. But I'm sure that is not the intention of the Blue Dogs or a Judd Gregg. Obama is emboldening a group whose overriding goal is to break the social safety net, not strengthen it.

I believe that everything about this is a huge mistake. It validates incorrect right wing economic assumptions, incorporates their toxic rhetoric about "entitlements," focuses on the wrong problems and continues the illusion that social security is in peril when it isn't. The mantra of shared sacrifice sounds awfully noble, but it isn't very reassuring to talk about the government going broke at the moment, particularly when the cause of our problems isn't the blood-sucking parasites who depend on government insurance when they can't work, but rather the handiwork of the vastly wealthy who insist on operating without restraint and refuse to contribute their fair share. I would have thought that a bipartisan commission on financial system reform might have at least been on the agenda before social security.

Obama is empowering the Republicans and the Blue Dogs with this fiscal responsibility rhetoric and perhaps he believes they will reward him by acting in good faith. And maybe they will.Or perhaps he thinks he can jiu-jitsu the debate in some very clever way to actually bolster social security and enact universal health care. But it's a big risk. I believe that all this talk about "entitlements" and fiscal responsibility will make it much tougher to sell universal health care and easier to dismantle some of the safety net at a time when many people have just lost a large piece of their retirements, their jobs and their homes. It's very hard for me to understand why they think it's a good time to do this.

There's actually another way to go with all this, and that is claiming the mandate given by the voters, based on very clear elements of change. George Bush tried to privatize Social Security completely out of nowhere, and despite his majorities in Congress that was a key reason for its downfall. Social Security and Medicare were not tossed around during the campaign outside from a little bit in the primaries (and Obama was immediately slapped down hard for doing so and he never returned to it, except to explain that McCain thought Social Security was a disgrace). There's this Beltway disease where "entitlements" are always the most pressing issue, and in this case, it's really quite the opposite (By the way, there's never been a more descriptive word for how the Village thinks of the people than "entitlements" - how dare they think they're entitled to not starving and being cared for in their old age!). The economy is a mess and major spending is needed, and deficits don't matter for the near term. But responsible "centrists" think that a Grand Bargain must be made, and so the price for a moderately liberal policy on short-term spending must be the end of Social Security and Medicare. Tom Frank's op-ed is brilliant:

There is no branch of American political expression more trite, more smug, more hollow than centrism.

After all, as Mark Leibovich pointed out in Sunday's New York Times, transcending faction has been the filler-talk of inaugural addresses going back at least to Zachary Taylor's in 1849. When you hear it today -- bemoaning as it always does "the extremes of both parties" or "the divisive politics of the past" -- it is virtually a foolproof indicator that you are in the presence of a well-funded, much-televised Beltway hack [...]

The reason centrism finds an enthusiastic audience in Washington, I think, is because it appeals naturally to the Beltway journalistic mindset, with its professional prohibition against coming down solidly on one side or the other of any question. Splitting the difference is a way of life in this cynical town. To hear politicians insist that it is also the way of the statesman, I suspect, gives journalists a secret thrill.

Yet what the Beltway centrist characteristically longs for is not so much to transcend politics but to close off debate on the grounds that he -- and the vast silent middle for which he stands -- knows beyond question what is to be done.

And centrism's achievements? Well, there's Nafta, which proved Democrats could stand up to labor. There's the repeal of the Glass-Steagall Act. There's the Iraq war resolution, approved by numerous Democrats in brave defiance of their party's left. Triumphs all.

These things don't typically work out. Obama, responsible centrist that he is, had better opt for what ACTUALLY works. Even if it is, Heaven to Betsy, ideological.