The Way Forward

This has been a big week, with the release of the Ryan budget and today either the imminent shut down of the federal government or the last second avoidance of same. The biggest overarching public policy question facing our country is how to address the long term federal budget deficit.  That we will deal with it at some point is inevitable.  The question is how quickly do we start, and what policy route do we take?

The debate around funding the government for the rest of 2011 and whether to cut $33 Billion or $35 Billion or $37 Billion from domestic discretionary spending is irrelevant to the long term budget deficit. Now the shut down debate apparently hinges on abortion politics. The Democratic party has only itself to blame that this debate is even possible, because for all the legislative success of the last Congress, they failed to pass a budget which is the most basic task required of Congress. The endless Continuing Resolution discussions have been a terrible distraction that have allowed the Republican party to talk a great deal about spending and the deficit while focusing on cutting what amounts to rounding errors when viewed in light of our long term fiscal situation.

However, I agree with Aaron that for all the flaws of Paul Ryan’s budget, at least he wrote something down that didn’t claim there was a painless way out. And most importantly, Ryan provides a clear choice on how to address health care costs (the main driver of long term deficits) as compared with the Affordable Care Act.  I am not talking about the details of premium support, the Medicare eligibility age, or the rate at which subsidies are updated, but the clearly different big ideas of the two approaches:

  • The ACA says we will expand coverage while addressing health care costs
  • Ryan says we cannot afford to expand coverage but we must address health care costs

This provides a clarifying choice.

We have got to come up with some way of slowing the rate of health care cost inflation or the auto-pilot of our health care system will severely harm our economic future. Without a workable strategy, a balanced budget is impossible. We will never address health care costs with either a Democratic law, or a Republican law. The ACA is imperfect, and I believe we need a compromise to make it the health reform vehicle of both political parties. Once we have that, we can embark on what will likley be a 30 year struggle to muddle through attempts to slow health care costs in a culturally acceptable manner. Based on my understanding of the issues, I have written what I think a compromise could look like.  Such a deal seems politically impossible in the current political climate. So, is there any hope of anything consequential happening between now and the 2012 election?

I think the only way is for the President to make a serious proposal on Social Security, in concert with discussions that appear to be ongoing in the Senate. There are several reasons why I think Progressives need to drive this cause, at some great political risk, in this Congress:

  • Progressives need a sustainable budget more than Conservatives given their view that government has an important role to play in modern life
  • There is a problem that needs to be fixed; now Progressives have substantial influence; they may not if the fix is done later
  • Once a fix is agreed to, Social Security reform could be put on auto-pilot and be expected to work as intended, because its benefits are cash payments
  • There may be some economic benefits of simply adopting a fix
  • Many Conservatives also want to fix Social Security, and may join in if lead by a Progressive President; they have been burned politically trying to lead on this in the past

Who knows, if we somehow managed to agree to a bipartisan fix to Social Security, we might also manage to adopt a health reform compromise. And if not, we could fight out the future of health reform around the two clarifying big ideas noted above in the 2012 election, at least having taken one big issue off the table.




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