Entitlement reform and the GOP: Goodbye to all that?

logoby James Pethokoukis, AEI

Not much talk about the national debt during this GOP primary season. Oh, there’s the obligatory — passing — reference to it during speeches and debates, but little more. Indeed, GOP tax plans would make the debt much worse by trillions over the next decade and beyond.

Now maybe one reason there’s less debt talk is that budget deficits are way down, and the long-term fiscal outlook improved. On the latter front, the WSJ’s Grep Ip highlights a new study — co-authored by former CBO boss Doug Elmendorf — that forecasts the US debt-GDP ratio won’t hit 100% until 2032 vs. the CBO’s 2009 forecast of 2023. (Thank low interest rates and slower healthcare inflation for that.)

But maybe another reason Republicans aren’t talking about the debt is that it’s hard to do so without also talking about deep Medicare and Social Security reform. And while entitlement reform was a pretty hot topic early in the Obama presidency, passion on the right has waned. Reforming entitlements is out, defending them is in. As Donald Trump has put it: “Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid. And we can’t do that. And it’s not fair to the people that have been paying in for years and now all of the sudden they want [it] to be cut.” Here’s WSJ columnist Holman Jenkins:

Mr. Trump is a political harbinger here of a new strand of populist Republicanism, largely empowered by ObamaCare, in which the “conservative” position is to defend the existing entitlement programs from a perceived threat posed by a new-style Obama coalition of handout seekers that includes the chronically unemployed, students, immigrants, minorities and women.

This political rationale was emerging in the 2012 Obama- Mitt Romney race, though not yet fully formed. It surfaced again in the 2013 tea party fight over the debt limit, a Kabuki play that allegedly threatened national default. The Kabuki was driven, recall, by the demand of Mr. Cruz and other tea party types that ObamaCare be “defunded.” … The tea party animus toward ObamaCare is something different: Implicitly, such means-tested new entitlements that benefit working-age folks and people (read minorities) who typically vote Democrat are viewed as a threat to the traditional, universal, “earned,” middle-class retirement programs of Social Security and Medicare. … The unspoken tea party stance of defending the good old-fashioned entitlements of “real” Americans is increasingly, in dog-whistle terms, what differentiates one Republican from another.

Chris Christie, who went nowhere in Iowa, did himself no favor by dragging Social Security and Medicare into every debate, however much those programs need to be addressed. Marco Rubio was just as quick to modify any implication that Republicans therefore are entitlement reformers: “We are talking about reforms for future generations. Nothing has to change for current beneficiaries. My mother is on Medicare and Social Security. I’m against anything that’s bad for my mother.” Welcome to an important new fault line in our slow-growth, resource-constrained America. Though many of us believe the entitlement programs need to be reformed, success will come increasingly to Republicans who pose as “conservative” defenders of Social Security and Medicare.

091615urban1In other words, government checks going to more likely GOP voters are “earned benefits,” those to Democratic voters, “welfare.” Medicare and Social Security good, Medicaid, Obamacare and income supports bad. Or as Jenkins phrased it in an earlier column: “The new ‘conservative’ position will be to defend Social Security and Medicare, those middle-class rewards for a life of hard work and tax-paying, against Mr. Obama’s vast expansion of the means-tested welfare state for working-age Americans.” Certainly not every Republican is totally buying into this. Rubio, for instance, does support sweeping Med-SocSec reform — though I don’t know how much he talks about it on the presidential campaign trail.

A few economic policy notes: First, the future projected cost growth of middle-class entitlements will need to be reduced.

Second, a GOP Obamacare replacement plan may not spend as much as Obamacare is projected to, but it will spend more than than a return to the pre-Obamacare status quo. The 2017 Project has devised an ObamaCare alternative that would include refundable tax credits for individuals and the uninsured to buy private health insurance. The proposal would cost about a trillion bucks over ten years.

Third, the globalized, technologically advanced US economy might require a broader array of income supports than many GOPers now consider wise. AEI’s Charles Murray, a supporter of a government-guaranteed basic incomehas argued thusly: “Massive government redistribution is an inevitable feature of advanced postindustrial societies.”

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