JONATHAN CHAIT NOVEMBER 16, 2010
Ross Douthat writes that the reaction to the debt commission shows that Republicans take the deficit more seriously than Democrats:
Last week’s media coverage sometimes made it sound as if Bowles and Simpson were taking the same amount of fire from left and right. But the reaction from Republican lawmakers and the conservative intelligentsia was muted, respectful and often favorable; the right-wing griping mostly came from single-issue activists and know-nothing television entertainers. The liberal attacks, on the other hand, came fast and furious, from pundits and leading Democratic politicians alike — starting with the speaker of the House, Nancy Pelosi, who pronounced the recommendations “simply unacceptable” almost immediately after their release.
There are a couple problems here. First, if you follow his links, Douthat is casting National Review as a key organ of the Republican Party and Grover Norquist and Sean Hannity as isolated voices. I think the reverse is much closer to the truth.
Second, I think that, while some liberals disputed the very idea of having to reduce the long-term deficit, most reacted to the specific policy mix offered up by the commission's chairmen. Now, Douthat argues otherwise in his column. Fortunately, we have a handy way to test which one of us is correct. Back in February, Congress held a vote on establishing the commission and requiring and up or down vote on its proposal. This was a good test of the two parties' interest in the concept of deficit reduction. Democrats supported the commission by a 37-23 vote, and Republicans opposed it 23-17.
Because Republicans demonstrated such hostility to the commission, it had to bend over backward to accommodate Republican preferences, produces a mix overwhelmingly tilted toward spending cuts over new revenue, and slashing tax rates. Douthat, in a follow-up item, argues that the plan isn't really so conservative because it would maintain federal spending at 22% of GDP in 2010, which is above the historic average. But in the absence of action, spending is projected to be about 26% of GDP. Obviously, you have to compare any legislative change to doing nothing, and trimming spending by 4% of GDP compared to doing nothing would be a pretty big deal.
Douthat's column also scolds liberals for opposing means-testing of Social Security. Liberals argue that the programs need to eb universal in order to maintain political support -- programs just for the poor quickly become unpopular. That argument, replies Douthat, "ignores the lessons of liberalism’s usual teacher, Western Europe, where governments have successfully reduced spending on their pension and entitlement systems without compromising their commitment to their neediest citizens."
Now, I favor means testing. But Western Europe is a terrible example to rebut the liberal fear of means-tested programs. Western Europeans support means-tested programs precisely because their countries tend to be racially homogeneous:
European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters.
If you go too far in turning Social Security and Medicare into safety-net programs for the poor, then white people will come to see them as transfers from people like themselves to undeserving others. Indeed, in the United States, white ethnocentrism correlates with support for universal entitlement programs like Social Security, and opposition to means-tested programs like welfare.
I think Social Security and Medicare are popular enough to withstand some means-testing. But pointing to Europe as an example that liberals have nothing to fear is terribly unpersuasive. It's precisely the ways in which we're unlike Europe that make universal benefits so much more politically necessary.