June 08, 2013
The “grand bargain” to cut Social Security and Medicare is looking increasingly dead these days. Projections for future deficits have fallen sharply because of the sequester, higher than expected tax revenues (although with slower than expected growth), and much slower projected health care cost growth.
This situation has made the Post very unhappy. It ran a front page piece with the headline, “urgency on the debt fades with big issues unsolved.” Of course this is not true.
The big issues have been solved, we will maintain Social Security and Medicare pretty much in their current form. The Post doesn’t like this fact, but this is a position that is supported by the vast majority of people across the political spectrum.
We haven’t decided how we will make up projected shortfalls in these programs in the decades ahead, but so what? There is no obvious reason why we have to schedule tax increases decades ahead, we have often in the past raised taxes with little or no notice. (In 1993 Congress actually raised taxes retroactively, since the income tax increase applied to calendar year 1993, but wasn’t passed into law until the summer.)
To express its unhappiness with Congress’ unwillingness to adopt its agenda, the Post turned to both the Concord Coalition, which was founded by Peter Peterson and the Committee for a Responsible Federal Budget, which is funded by Peter Peterson. There was no one cited in the article who has been a vocal proponent of addressing the jobs crisis, who could have pointed out that the deficit hawks have been shown 180 degrees wrong in their predictions about interest rates and inflation.
Remarkably, while the piece complained about Congress’ inaction on cutting Medicare costs, it neglected to mention that the projected shortfall in the program has been reduced by almost 70 percent since 2008. One of the factors behind this drop is the cost control measures in the Affordable Care Act.
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