JONATHAN CHAIT MARCH 18, 2010
Former Bush speechwriter Michael Gerson explains why it's fiscally irresponsible for Democrats to cover the uninsured even if they pay for that coverage with savings and new taxes:
[W]e have learned that the president and congressional leaders are not serious about entitlement reform. The problem here is not only accounting tricks and the assumption of unprecedented courage on the part of future Congresses when it comes to Medicare cuts -- though these are bad enough. The main source of irresponsibility is that the revenue-gaining measures in the health bill -- particularly Medicare cuts and taxing "Cadillac" health plans -- would be used to create a new entitlement instead of repairing an existing one. The greatest cost of the current reform is its opportunity cost.
The unfunded liability of America's current entitlements is more than $100 trillion. Medicare will eventually require a massive infusion of cash under a congressional entitlement fix. Both the Congressional Budget Office and the Medicare actuary have pressed the point that Medicare savings can be used to pay future Medicare benefits or to finance new spending outside Medicare -- not both. When the entitlement crisis arrives, Obama will have already spent much of the resources required to meet it, leaving growth-killing new taxes as the main remaining option.
So Gerson thinks it's irresponsible for the government to take on the responsibility of providing health insurance to 30 million Americans who lack it, even if it's completely paid for, because other liabilities are not completely paid for. This is the same man who relentlessly champions the Bush administration's creation of a new entitlement in Medicare that was 100% deficit financed.
Now, not all conservatives are as wildly hypocritical as Gerson, because not all of them favored the prescription drug bill. But Gerson is espousing a common conservative position: They think it's fiscally irresponsible to cover the uninsured, even if the measure saves the government money, because it doesn't solve every future fiscal liability the government faces. The logic here is useful in assessing the GOP's reassuring argument that they just want to go step by step, first controlling costs, and then covering the uninsured. Gerson makes the case in unusually blunt terms. He's saying, first you have to find $100 trillion in savings for Medicare and Social Security. And then maybe we can talk about the uninsured.
Let's pretend that could happen. Okay, we've permanently solved the long-term liabilities of Social Security and Medicare. Let's try to imagine how the Republicans would behave in a situation where they believed, or at least claimed, that all the long term needs of the federal budget had been solved.
Actually, we don't have to imagine. It happened in 2001. Facing a temporary surplus swollen by the height of an economic and stock market boom, Republicans claimed -- against Democratic objections -- that the federal government would soon completely pay off the national debt, and it was therefore time for a huge permanent, regressive tax cut. Here is George W. Bush delivering a major address to Congress that I believe Gerson had a hand in:
We have increased our budget at a responsible 4 percent. We have funded our priorities. We paid down all the available debt. We have prepared for contingencies. And we still have money left over.
Yogi Berra once said, "When you come to a fork in the road, take it."
Now we come to a fork in the road. We have two choices. Even though we have already met our needs, we could spend the money on more and bigger government. That's the road our nation has traveled in recent years.
Last year, government spending shot up 8 percent. That's far more than our economy grew, far more than personal income grew and far more than the rate of inflation. If you continue on that road, you will spend the surplus and have to dip into Social Security to pay other bills. Unrestrained government spending is a dangerous road to deficits, so we must take a different path.
The other choice is to let the American people spend their own money to meet their own needs.
I hope you'll join me in standing firmly on the side of the people. You see, the growing surplus exists because taxes are too high, and government is charging more than it needs.
Notice that covering the uninsured did not count among those needs.
Basically, the New Yorker cartoon above summarizes the Republican position on covering the uninsured. How about never -- is never good for you?