Entitlements & tough choices
President Donald Trump and Republicans in Congress have a once-in-a-generation opportunity to dramatically roll back the frontiers of government — but will likely fall short because of their lack of candor and finesse.
Steve Bannon's “deconstructing the administrative state” is great for rallying troops in an electoral campaign. But it's terrible politics when translated into a ham-handed budget that slashes too much that is worth preserving and avoids tough choices about entitlements.
Trump's repeated promise to replace ObamaCare with something better, less-expensive and terrific becomes empty when juxtaposed against the American Health Care Act, which would have raised insurance costs for many low-income, rural and older citizens. It would have created new subsidies for families earning more than $98,400 a year, and offered little encouragement to control the cost for drugs and basic health services.
CNN profiling little old ladies who would lose their Meals on Wheels, and the Congressional Budget Office finding that millions of Americans would go without health care coverage — not necessarily by choice but because the AHCA would have pushed premiums out of reach — are not products of the media's left-leaning biases.
Democrats get elected by delivering new and bigger entitlement programs, from Medicaid to ObamaCare — and by sending to the states federal largess that permits governors and mayors to dole out patronage without having to tax to pay for them.
Entitlement programs often reward undeserving beneficiaries; for example, the millions of men ages 25 to 54 who neither work nor seek employment but can qualify for food stamps and free health care.
Republicans campaign to generally scale back government but rarely take aim at federal largess that benefits their particular constituents.
Without any changes in existing programs, entitlement spending and interest on the national debt will consume virtually all federal tax revenue by 2027. Then Washington will have to raise taxes to levels that absolutely cripple business and growth, let wither the military and vital civilian services or impose draconian cuts on Social Security and assistance to the truly needy.
Entitlements and interest on the debt already consume about two-thirds of the $4 trillion in federal spending, with defense and discretionary spending approximately splitting the balance.
Much of what the Environmental Protection Agency, Department of Education and other agencies spend represents federal regulatory overreach. However, slashing the State Department, medical and other research and development support is senseless when the nation faces challenges from ISIS, China's growing power and escalating international economic competition.
The president's budget should have plainly stated that the nation can no longer afford to subsidize the indolent along with the truly needy while neglecting defense and handicapping the legitimate civilian functions of a global power.
The Trump document fails to address the tough choice before the nation — expect less of government or the country will simply go bust.
Peter Morici is an economist and business professor at the University of Maryland.