Advancing a Free Society

A Political Argument for Entitlement Reform Before 2013

Thursday, February 17, 2011

Everyone recognizes that there are formidable political pressures working against efforts to reform Social Security, Medicare, and Medicaid during the remainder of Obama’s first term. In addition to the usual difficulties, both parties have already started their campaigns for 2012. Obama and the Democrats are no doubt attracted to the option of taking no real action while blaming the Republicans. If Democrats can’t come off as better on fiscal discipline than the Republicans, they can try to come off as no worse. The president and Democrats will then campaign hard on the Republicans’ proposed spending cuts. The motif of the Democratic campaign becomes this: We need Obama and the Democrats to contain the slash-and-burn Republicans in Congress.

Republicans are tempted to use a stalemate on entitlement reform to blame the president for lack of leadership on deficit reduction, or what Louisiana Senator and Democrat Mary Landrieu has called “the issue of the decade.” The Republicans would try to set up a clear choice between the president as an incorrigible tax-and-spend liberal and GOP campaign promises about what a Republican president working with a Republican Congress would do. If the economic recovery continues to sputter throughout 2012 and the Republicans can tie weak economic growth under Obama to the federal fiscal mess, this campaign strategy could pay off big for the Republicans.

But a stand off is politically risky too, even for the party that would eventually benefit most from it in 2012. Gridlock on entitlement reform for the next two years is likely to mobilize Tea Party sympathizers. This could make governing in 2013 more difficult for either party.

Let’s start with the Republicans. If Washington does not address some portion of the entitlement spending problem now, Tea Party frustrations will only continue to build. And if the Republicans retake the White House and pick up additional seats in Congress in 2012, emboldened Tea Partiers (who will take credit for those victories) would pressure the president and congressional leaders to make deep cuts in both discretionary and entitlement spending. Those demands will conflict with the policy preferences of other constituents who would prefer a mixed package of program cuts, benefits reductions, and tax increases.

Whatever you think about the best policy choices, this is not a desirable political position. It’s made worse by not being able to share the responsibility for unpopular but necessary policy decisions with the Democrats. The Republicans could wind up overreaching on policy and find themselves facing big seat loses in the midterm election in 2014 (see the midterm elections of 2006, 2010).

What should the president be concerned about? If the president wins reelection but a lack of progress on entitlement spending and deficit reduction further energizes the Tea Party in congressional elections, Obama could begin a second term with a Congress even more hostile to his policy goals than the one he has now.

The likelihood that the White House and most congressional lawmakers will look past the next election is small, I know. But not dealing now with at least part of the entitlement spending problem is definitely bad policy and it might wind up creating major political problems for whichever party wins the presidency in 2012.