Sunday, August 06, 2006

Whistling Past The Entitlements Graveyard

Newly minted Treasury Secretary Henry Paulsen's kick-off speech took the imperative need for entitlements reform head-on. The Democrats' response was the typical indignant ostrichism - so overpoweringly irresponsible that even the WaPo op-ed page couldn't abide it:

You might think that a call from the new Treasury secretary for reform of entitlements would get a respectful hearing from Democrats. If entitlement programs are not reformed, they will squeeze out other spending programs that Democrats care about; they will create a budget crunch that no responsible party could want. But some Democrats do not appear to understand this. Yesterday an e-mail sent out on behalf of Nancy Pelosi, the House minority leader, dismissed Henry M. Paulson Jr.'s comments on "privatizing" Social Security, adding that this policy has been "soundly rejected by the American people." ...

[T]he idea that the American people rejected Mr. Bush's plan is only half true. The President failed to get traction not least because Democrats were doing their best to scare voters into thinking that their retirement checks would be confiscated.

The other reason the President failed to get traction on privatizing Social Security (for younger Americans, not current recipients) is that he insisted upon "working with the Democrats in the spirit of bipartisanism" instead of putting forth his own plan and selling it. All that accomplished was to incur the inevitable dishonest Dem-agoguery without any real alternative to compete against it. Yet another example of how Bush's obsession with "the New Tone" bound and gagged him and tied him to a stake before the trigger-happy Donk firing squad.

I don't know if Secretary Paulsen's speech is an indication that the White House is going to try again on reforming entitlements (It would be strange timing indeed three months before election day), but Crazy Nancy's smug dismissal of the entire concept stands out in gaping contrast to the warning issued recently by U.S. Comptroller-General David Walker:

Walker has revealed America's collision course in computer simulations that show balancing the budget in 2040 (under the status quo of spending like there's no tomorrow) could require cutting total federal spending by an incredible 60% - or raising federal taxes 200% over today's level.

As far as Mr. Walker is concerned, everything needs to go on the chopping block - everything:

The bottom line, according to Walker: "We must make tough choices, and the sooner the better."

The chief financial overseer advises that a multipronged approach is needed:

Revise existing budget processes and financial reporting requirements.

Restructure existing entitlement programs.

Re-examine the base of discretionary and other spending. [Stop using static fiscal forecasting models in favor of dynamic scoring]

Review and revise tax policy and enforcement programs - including tax expenditures. [i.e. raise taxes]

"Everything must be on the table," says Walker.
The last suggestion is a non-starter, because even with the two rounds of Bush tax cuts, the tax burden is still too high. The problem is, as it has always been, on the spending side, and that is the side that is going to have to be hacked to death if fiscal disaster is to ultimately be averted.

Democrats have a choice: they can be part of the problem, or part of the solution. Either way, the entitlements state must be rendered extinct, and will be, because what would be required to sustain it will not be politically possible.

And as we all know so well by now, Democrats are not real big on solutions - which is the problem that will continue to keep them from the power they crazedly seek.

[via CQ]