Copyright 2002 Plain Dealer Publishing Co. The Plain
Dealer
August 7, 2002 Wednesday, Final / All
SECTION: METRO - OP ED; Pg. B11
LENGTH: 803 words
HEADLINE: Two
options: higher taxes or means testing
BYLINE:
Matthew Miller, Special to The Plain Dealer
BODY: Washington was baffled when Senate Democrats
pushed for a stripped- down version of their sweeping (and failed) Medicare prescription drug plan, this time targeted at needier
seniors. Why, the Beltway asked, would Democrats suddenly push a plan smaller
than the GOP plan they rejected in the original debate?
That one's not hard: They wanted to have something to show voters. But
no one asked the more interesting question: Why do Democrats - with this rare
exception - shrink from "means-testing" federal benefits in the first place?
Especially when $200 billion in entitlements and tax subsidies each year go to
people who earn more than $50,000?
The answer lies in
warring impulses at the heart of the Democratic creed, principles so fundamental
and so at odds that Democrats' first response, as with anyone experiencing deep
emotional conflict, is denial.
It's the showdown
between the Democratic commitment to universal programs and their belief that,
in a progressive society, those who are needier should get more help. This
tension will cast a shadow over everything the Democratic Party does for the
next decade.
To see why this matters, you need a few
facts. In the early 1960s, "entitlements" accounted for just 30 percent of
federal spending. Today these programs - mainly Social Security, Medicare,
Medicaid and military and civil service pensions - make up roughly two-thirds of
the budget.
The remaining "discretionary" portion of
the budget, funded by annual congressional appropriations, is shrinking fast. At
this rate, after the baby boomers' retirement sends health and pension costs
soaring, entitlements and interest on the national debt will take up nearly all
expected revenue. There will be few pennies left for the FBI, the Pentagon,
national parks or the myriad other activities that even conservative nihilists
bless.
Nor will there be a dime to bolster our lagging
R&D, education and infrastructure investments, or for new efforts to insure
the uninsured. Government will have become a giant "ATM machine."
To avoid bequeathing this straitjacket to our kids, we
have two options: Taxes must go up; entitlement growth must be trimmed (with
means-testing a big potential saver); or some combination. Here's where
Democratic denial comes in.
Universalists say the
universal nature of programs like Social Security and Medicare, into which
everyone pays and knows they'll get out what they're supposed to, is precisely
what ensures their political viability. Alter this by explicitly scaling back
benefits for well-off Americans, and you'll stigmatize these programs as
"welfare."
Rich folks will fight to opt out. The whole
notion of social insurance, and the transfers to needier citizens that take
place within it, will erode. "Bribing" better-off citizens to maintain their
support is a reasonable price to pay for the social good these programs
bring.
Even if this political logic is right (which is
unclear), there's a problem. As we look down the road, the only way to maintain
generous universal entitlements, increase investments to meet new national needs
and keep the budget near balance is for taxes to rise sharply as a share of
GDP.
Democratic economists may think this is
inevitable, but the politicians in whose ears they whisper aren't (for obvious
reasons) talking this way. Eventually, something will have to give. As a matter
of budget math, it turns out, the Democratic Party's long-run incoherence is
even worse than its near-term muddle - an impressive fact.
The handful of farsighted Democrats who "get it," like former Sen. Bob
Kerrey of Nebraska, worry that in piously defending universality and the budget
juggernaut that comes with it, Democrats tragically abet long-term GOP plans to
scrap many programs, including those for the needy, since before long there
won't be enough money to pay for it all.
All of which
lends the Democrats' prescription drug flip-flop deeper significance. By even
flirting with a lower-cost targeted plan (which, for political reasons, didn't
pass either), Democrats took the first step away from denial.
If I sound hard on Democrats, there's a reason. Their internal debate
is the one place where politicians are grappling to square a reasonable overall
tax burden with a decent and sustainable safety net for an advanced society. For
now, all George W. Bush's GOP does is discredit and defund a government it knows
has a baby boom to digest. Shame on them.
If our choice
is between the irresponsible and the incoherent, our hopes lie with the latter.
Which is why sooner or later, like Dr. Strangelove, Democrats may have to stop
worrying and learn to love means-testing.
Miller is a
senior fellow at Occidental College in Los Angeles. (Tribune Media)
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