WASHINGTON—Republicans and Democrats in Congress are having major differences over how much to cut the federal deficit for the 2011 fiscal budget. So far, they have only been able to agree to short-term continuing resolutions (CRs) lasting two and three weeks, regarding cuts that have been limited to non-defense discretionary funding.
Looming over the horizon is another battle over raising the national debt ceiling of $14.3 trillion that if not accomplished could possibly lead the country to default on its debts. Treasury Secretary Timothy Geithner has warned of “catastrophic economic consequences that would last for decades,” and Federal Reserve Chairman Ben Bernanke has warned that even the possibility of default could have negative consequences for Treasury bond interest rates and the economy, according to the Christian Science Monitor.
The Department of Treasury issued a statement March 1 “estimating that the United States will reach the debt limit between April 15, 2011 and May 31, 2011.” So, a lively debate is certain to ensue before then, as many conservative Republicans are on record as opposing the raising of the debt ceiling once again.
These battles on deficit reduction and national debt limit, however, pale in significance to the clashes certain to arise on the 2012 budget, when cutting entitlements, especially Social Security, Medicare, and Medicaid, are sure to come up.
The Hill newspaper reported that 23 Republican senators—nearly half the number of GOP senators—signed a letter to President Obama, which says that it will be very hard to approve raising the debt ceiling unless the president puts entitlements—Social Security and Medicare—on the table. Thus, the stage is set for a major confrontation on where to make the entitlement cuts and how big they should be.
One of the country’s leading intellectuals, eminent sociologist Amatai Etzioni, says it is morally wrong “to take a knife to Social Security and Medicare.” The 82-year-old award-winning professor from George Washington University was speaking at the Women’s National Democratic Club, before a friendly, partisan audience.
Dr. Etzioni has served as a senior adviser to the Carter White House and as president of the American Sociological Association. His career includes teaching at Harvard, Columbia, and the University of California at Berkley. He has written 24 books. The latest is, “New Common Ground,” published in 2009.
Etzioni recognizes the pressures on the president and lawmakers to reduce the debt by making draconian cuts to entitlements, Social Security, Medicare, and Medicaid. When other mandatory spending is added to these three, such as pensions and interest on the debt, the amount is about 60 percent of the total federal budget, according to various estimates.
Etzioni, who was named among the top 100 American intellectuals in Richard Posner’s book, “Public Intellectuals: A Study of Decline,” said the mathematical argument that the need to cut entitlements because of their size could be refuted by finding additional revenue sources to pay for increases in expenditures. He suggested a tax on carbon, for example, would be good for the environment and make us less dependent on foreign powers and could generate enough revenue so that we would not have to worry about cutting the deficit. A value added sales tax would be another option.
This argument is probably the least appealing of the four arguments he made because he is assuming that growth in these entitlement programs is not a serious problem, and he is not bothered by further entitlement expansion.
Randy Forbes (R-Va.) wrote in an oft-cited paper in 2008 that the growth in these programs is not sustainable. Based on a report by the conservative think tank Heritage Foundation, Forbes wrote, “Health care spending has consistently grown one-third faster than the economy, and if the same growth rate continues over the next four decades, Medicare and Medicaid programs alone would equal as large of a fraction of our economy as the entire federal budget does today. Projected spending increases for Medicare, Medicaid, and Social Security will soon create an unsustainable deficit.”
Next, Dr. Etzioni said that it is morally wrong to cut entitlements when there is wasteful spending and costs that should be reduced first. The United States is the only civilized country that allows advertising for pharmaceutical drugs. If we were to ban this advertising, he said we could eliminate “30 percent of prescriptions that we don’t need.” Reducing the number of medical errors that cause the deaths of 96,000 hospital patients and harm 250,000 is another way for these programs to become more efficient.
His strongest argument, especially for this audience of party Democrats, was that it is good politics for Democratic lawmakers to take a strong stand against any entitlement cuts. He cited a recent Wall Street Journal/NBC News poll that asked respondents if they thought cuts to Medicare were necessary to “significantly reduce” the deficit. Some 54 percent said no, while only 18 percent said yes (the remainder were not sure or had no opinion). On Social Security, 22 percent said cuts would be needed, while 49 percent said they were not.
Social Security is the one issue in which the electorate trusts the Democrats much more than the Republicans. “There is no issue that gives the Democrats as much leverage as protecting Social Security,” he said.
Finally, he said history gives examples of governments invoking austerity measures during recessions that held back their recoveries. He cited Britain and Germany as examples. The first priority should be jobs, not the deficit, he said. It is the wrong time to make cuts.
Etzioni made the case that the proper time to reduce the deficit is when the unemployment rate falls, say, below 7 percent. Then a commonly agreed plan could go into place without harming the recovery and the social safety net. He writes in his March 15 blog that public opinion supports these priorities.
“According to a February 2011 Gallup poll, 35 percent of Americans felt unemployment was the most important problem facing America; only 11 percent said the same of the deficit. Another February poll conducted by Pew found the same trend.”
Etzioni worries that the president and centrist Democrats will weaken and take the lead in making cuts to Social Security and Medicare.
Looming over the horizon is another battle over raising the national debt ceiling of $14.3 trillion that if not accomplished could possibly lead the country to default on its debts. Treasury Secretary Timothy Geithner has warned of “catastrophic economic consequences that would last for decades,” and Federal Reserve Chairman Ben Bernanke has warned that even the possibility of default could have negative consequences for Treasury bond interest rates and the economy, according to the Christian Science Monitor.
The Department of Treasury issued a statement March 1 “estimating that the United States will reach the debt limit between April 15, 2011 and May 31, 2011.” So, a lively debate is certain to ensue before then, as many conservative Republicans are on record as opposing the raising of the debt ceiling once again.
These battles on deficit reduction and national debt limit, however, pale in significance to the clashes certain to arise on the 2012 budget, when cutting entitlements, especially Social Security, Medicare, and Medicaid, are sure to come up.
The Hill newspaper reported that 23 Republican senators—nearly half the number of GOP senators—signed a letter to President Obama, which says that it will be very hard to approve raising the debt ceiling unless the president puts entitlements—Social Security and Medicare—on the table. Thus, the stage is set for a major confrontation on where to make the entitlement cuts and how big they should be.
The Case Against Cutting Entitlements
One of the country’s leading intellectuals, eminent sociologist Amatai Etzioni, says it is morally wrong “to take a knife to Social Security and Medicare.” The 82-year-old award-winning professor from George Washington University was speaking at the Women’s National Democratic Club, before a friendly, partisan audience.
Dr. Etzioni has served as a senior adviser to the Carter White House and as president of the American Sociological Association. His career includes teaching at Harvard, Columbia, and the University of California at Berkley. He has written 24 books. The latest is, “New Common Ground,” published in 2009.
Etzioni recognizes the pressures on the president and lawmakers to reduce the debt by making draconian cuts to entitlements, Social Security, Medicare, and Medicaid. When other mandatory spending is added to these three, such as pensions and interest on the debt, the amount is about 60 percent of the total federal budget, according to various estimates.
Etzioni, who was named among the top 100 American intellectuals in Richard Posner’s book, “Public Intellectuals: A Study of Decline,” said the mathematical argument that the need to cut entitlements because of their size could be refuted by finding additional revenue sources to pay for increases in expenditures. He suggested a tax on carbon, for example, would be good for the environment and make us less dependent on foreign powers and could generate enough revenue so that we would not have to worry about cutting the deficit. A value added sales tax would be another option.
This argument is probably the least appealing of the four arguments he made because he is assuming that growth in these entitlement programs is not a serious problem, and he is not bothered by further entitlement expansion.
Randy Forbes (R-Va.) wrote in an oft-cited paper in 2008 that the growth in these programs is not sustainable. Based on a report by the conservative think tank Heritage Foundation, Forbes wrote, “Health care spending has consistently grown one-third faster than the economy, and if the same growth rate continues over the next four decades, Medicare and Medicaid programs alone would equal as large of a fraction of our economy as the entire federal budget does today. Projected spending increases for Medicare, Medicaid, and Social Security will soon create an unsustainable deficit.”
Next, Dr. Etzioni said that it is morally wrong to cut entitlements when there is wasteful spending and costs that should be reduced first. The United States is the only civilized country that allows advertising for pharmaceutical drugs. If we were to ban this advertising, he said we could eliminate “30 percent of prescriptions that we don’t need.” Reducing the number of medical errors that cause the deaths of 96,000 hospital patients and harm 250,000 is another way for these programs to become more efficient.
His strongest argument, especially for this audience of party Democrats, was that it is good politics for Democratic lawmakers to take a strong stand against any entitlement cuts. He cited a recent Wall Street Journal/NBC News poll that asked respondents if they thought cuts to Medicare were necessary to “significantly reduce” the deficit. Some 54 percent said no, while only 18 percent said yes (the remainder were not sure or had no opinion). On Social Security, 22 percent said cuts would be needed, while 49 percent said they were not.
Social Security is the one issue in which the electorate trusts the Democrats much more than the Republicans. “There is no issue that gives the Democrats as much leverage as protecting Social Security,” he said.
Finally, he said history gives examples of governments invoking austerity measures during recessions that held back their recoveries. He cited Britain and Germany as examples. The first priority should be jobs, not the deficit, he said. It is the wrong time to make cuts.
Etzioni made the case that the proper time to reduce the deficit is when the unemployment rate falls, say, below 7 percent. Then a commonly agreed plan could go into place without harming the recovery and the social safety net. He writes in his March 15 blog that public opinion supports these priorities.
“According to a February 2011 Gallup poll, 35 percent of Americans felt unemployment was the most important problem facing America; only 11 percent said the same of the deficit. Another February poll conducted by Pew found the same trend.”
Etzioni worries that the president and centrist Democrats will weaken and take the lead in making cuts to Social Security and Medicare.
