Sure, there was grumbling from the left over President Obama’s agreement to keep tax cuts in place for couples making between $250,000 and $450,000 a year. But that quickly gave way to satisfaction that Obama had won the “fiscal cliff” fight, and growing confidence that he can win the next round over the federal debt ceiling as well.
Two factors have given Democrats this unusual sense of unity and well-being: the surprisingly big margin by which Obama won November’s presidential election, and the obduracy of House Republicans in refusing to notice that their arguments lost. If the GOP wants to keep alienating voters by telling them they’re wrong, the Democrats are happy to offer them more opportunities.
In recent weeks, the president has dared Republicans to refuse to raise the federal government’s debt ceiling. He has made clear that he will push for significant immigration reform and gun control measures, issues on which Democrats believe the GOP is out of step with mainstream opinion.
“The dominant sense among Democrats is that the party is on a roll,” said William A. Galston, a former Bill Clinton aide now at the Brookings Institution. “And why not? 2012 was a victory, after all.”
But there’s a cloud on the Democrats’ blue horizon: the unsolved problems of federal spending and the national debt.
As Obama has acknowledged, if federal spending continues to grow unabated — especially on the big entitlement programs of Medicare, Medicaid and Social Security — there won’t be enough money in the Treasury to pay for much else. The modest increases in tax revenue he just obtained won’t be significant over the long run.
Even if the president wins the coming fight over the debt ceiling, there’s no escape from the spending problem. By the end of February, Congress must either undo the automatic sequester of federal funding that it ordained in earlier bouts of budget wrestling or see savage cuts to domestic and defense programs. And by the end of March, the government needs a new spending bill to allow agencies to keep operating.
That’s when the Republicans’ best chance to press for spending cuts will come. And that’s when Democrats could revert to their traditional feuding ways — because, as even Obama agrees, the biggest target for reductions is one of the Democrats’ favorite programs: Medicare.
“I agree with Democrats and Republicans that the aging population and the rising cost of health care (make) Medicare the biggest contributor to our deficit,” Obama said during the fiscal cliff negotiations. “I believe we’ve got to find ways to reform that program without hurting seniors who count on it to survive.”
Medicare already accounts for about 15 percent of federal spending (not counting interest), and the Congressional Budget Office projects that the cost will nearly double in 10 years if no changes are made. Bringing federal spending under control without touching Medicare simply isn’t practical.
But it’s a prospect that chills many Democrats because defending Medicare and Social Security benefits is the clearest unifying doctrine their party has, just as resisting tax increases is for Republicans.
So though Obama may agree in theory about the need for cuts, deciding what to cut is certain to be divisive. On the party’s left, many progressives hate the idea of touching Medicare at all. In 2011, after Obama flirted with accepting an increase in the Medicare eligibility age from 65 to 67 in talks with House Speaker John A. Boehner, R-Ohio, labor unions and other progressive groups quickly organized campaigns to denounce the idea.
In the party’s center, pro-business New Democrats worry that without major changes in Medicare, the federal deficit will balloon and the economy will suffer. But they didn’t hear much encouragement from Obama this week.
At his news conference Monday, instead of calling for far-reaching reforms, Obama said merely, “I’m open to making modest adjustments to programs like Medicare.”
And instead of proposing steps toward bipartisan consensus on the issue — the only way to fix Medicare because without it any changes will simply become fodder for election campaign attacks by both sides — Obama took a brass-knuckled swipe at GOP conservatives.
“They are suspicious about government’s commitments … to make sure that seniors have decent health care,” the president said. “They have suspicions about Social Security.”
Attacks like that may be great for party unity in the short run. But they’re a distraction from what Obama and his allies should be doing: building support among their own voters for real reform in Medicare, and then working to bring pragmatic Republicans along.
Otherwise, the now-victorious Democrats risk finding themselves, four years from now, in much the same place Republicans are today: so absorbed in maintaining their own unity that they’ve lost voters’ confidence in their ability to govern.
Doyle McManus is a columnist for The Los Angeles Times. Readers may send him email at doyle.mcmanus@latimes.com.
Re: “As Obama has acknowledged, if federal spending continues to grow unabated — especially on the big entitlement programs of Medicare, Medicaid and Social Security — there won’t be enough money in the Treasury to pay for much else”
I contend that Social Security and Medicare are NOT entitlement programs. I have paid/am paying for my share. Social Security is supposed to be a “trust fund insurance program”.
Congress and the U.S. Treasury are at fault for the mismanagement of these programs (i.e., adding in the ‘freebies’) and should be held responsible for proper funding of same.
Google each quote below for source(s).
1) “There are some common misconceptions related to the definition of an entitlement program. Many people believe that any program where the government gives people money is an entitlement program, but this is not the case. For example, people actually give money to the Social Security program during their years of work, so they are actually paying to gain access to that program, and it doesn’t necessarily qualify as an entitlement. Medicare is similar, although there are actually parts of both programs that could technically be called entitlement program elements.
An example of Medicare and Social Security being used as entitlement programs would be when someone is disabled and they can’t work. People in this situation are given access to Social Security funds, along with government medical insurance. These people don’t actually have to pay into the program to get a benefit, and this is what separates them from normal Medicare and Social Security recipients.”
2) “en•ti•tle•ment (n-ttl-mnt)
n.
1. The act or process of entitling.
2. The state of being entitled.
3. A government program that guarantees and provides benefits to a particular group: "fights . . . to preserve victories won a generation ago, like the Medicaid entitlement for the poor" (Jason DeParle).
The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.”
3) “Trust fund
Main article: Social Security Trust Fund
Social Security taxes are paid into the Social Security Trust Fund maintained by the U.S. Treasury (technically, the "Federal Old-Age and Survivors Insurance Trust Fund", as established by 42 U.S.C. § 401(a)). Current year expenses are paid from current Social Security tax revenues. When revenues exceed expenditures, as they did between 1983 and 2009,[36] the excess is invested in special series, non-marketable U.S. Government bonds, thus the Social Security Trust Fund indirectly finances the federal government's general purpose deficit spending. In 2007, the cumulative excess of Social Security taxes and interest received over benefits paid out stood at $2.2 trillion.[37] The Trust Fund is regarded by some as an accounting construct which holds no economic significance. Others argue that it has specific legal significance because the Treasury securities it holds are backed by the "full faith and credit" of the U.S. government, which has an obligation to repay its debt.
The Social Security Administration's authority to make benefit payments as granted by Congress extends only to its current revenues and existing Trust Fund balance, i.e., redemption of its holdings of Treasury securities. Therefore, Social Security's ability to make full payments once annual benefits exceed revenues depends in part on the federal government's ability to make good on the bonds that it has issued to the Social Security trust funds. As with any other federal obligation, the federal government's ability to repay Social Security is based on its power to tax and borrow and the commitment of Congress to meet its obligations.
In 2009 the Office of the Chief Actuary of the Social Security Administration calculated an unfunded obligation of $15.1 trillion for the Social Security program. The unfunded obligation is the difference between the future cost of Social Security (based on several demographic assumptions such as mortality, work force participation, immigration, and age expectancy) and total assets in the Trust Fund given the expected contribution rate through the current scheduled payroll tax. This unfunded obligation is expressed in present value dollars and is a part of the Fund's long-range actuarial estimates, not necessarily a certainty of what will occur in the long run. An Actuarial Note to the calculation says that "The term obligation is used in lieu of the term liability, because liability generally indicates a contractual obligation (as in the case of private pensions and insurance) that cannot be altered by the plan sponsor without the agreement of the plan participants."[38][39]”
4) “SOCIAL SECURITY NOW CALLED 'FEDERAL BENEFIT PAYMENT'/ENTITLEMENT!
emal | 12/8/2012 | email edited by Ib Jensen
Posted on 12/8/2012 7:42:06 AM by IbJensen
Have you noticed, your Social Security check is now referred to as a "Federal Benefit Payment"?
The government is now referring to our Social Security checks as a “Federal Benefit Payment.” This isn’t a benefit – its earned income!
Not only did we all contribute to Social Security but our employers did too.
It totaled 15% of our income before taxes. If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.
If you calculate the future value of your monthly investment in social security ($375/month, including both your and your employer’s contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3 million dollars saved! This is your personal investment.
Upon retirement, if you took out only 3% per year, you'd receive $39,318 per year, or $3,277 per month.
That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration (Google it - it’s a fact).
And your retirement fund would last more than 33 years (until you're 98 if you retire at age 65)! I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.
Instead, the folks in Washington pulled off a bigger Ponzi scheme than Bernie Madoff ever did. They took our money and used it elsewhere. They “forgot” that it was OUR money they were taking. They didn’t have a referendum to ask us if we wanted to lend the money to them.
And they didn’t pay interest on the debt they assumed. And recently, they’ve told us that the money won’t support us for very much longer. But is it our fault they misused our investments?
And now, to add insult to injury, they’re calling it a “benefit,” as if we never worked to earn every penny of it. Just because they “borrowed” the money, doesn't mean that our investments were a charity! Let’s take a stand.
We have earned our right to Social Security and Medicare. Demand that our legislators bring some sense into our government –
Find a way to keep Social Security and Medicare going, for the sake of that 92% of our population who need it.
Then call it what it is: Our Earned Retirement Income.” For full conversation on above go to http://www.freerepublic.com/focus/f-news/2966827/posts