New Party, New Budget: Why Obama is Proposing a Tough Budget on Entitlements

By Ronald Brownstein, Nation Journal–this article originally appeared with headline A New Budget for a New Party

Obama’s fiscal proposal aligns him with the politics of minority, millennial, and college-educated voters. 

The keening on the left about President Obama’s budget proposal this week suggests that large portions of the Democratic base still don’t understand the political and economic dynamics of the party’s changing electoral coalition.

Much of this year’s Washington story is about Obama aligning the Democratic agenda with the priorities of the “coalition of the ascendant”—minorities, the millennial generation, and college-educated whites, especially women—that powered his 2008 and 2012 victories. He is nearing Senate breakthroughs on gun control (which attracts overwhelming support from minorities and upscale whites, particularly women) and immigration reform (a top priority for Hispanics). At the Supreme Court, he embraced same-sex marriage, also tracking with millennials and upscale white women. Obama isn’t assured of victory in any of these confrontations, but the wavering Republican resistance across all three hints at the modern Democratic coalition’s potential to drive the national debate, especially as its key components continue to increase in number.

The Obama fiscal blueprint released this week cautiously dips into this same current by seeking to restrain entitlement spending while invigorating public investment (through initiatives such as expanded preschool, an infrastructure bank, and more college aid). That combination would challenge the federal budget’s hardening tendency to favor the old over the young. Through proposed changes in the way inflation is calculated to determine Social Security benefits, more cost-sharing for Medicare recipients, and cost savings from drug companies and health providers, the president is looking to reduce entitlement spending by about $800 billion over 10 years. That’s what has provoked the liberal uproar, with and other groups threatening primary challenges against any congressional Democrat who backs entitlement cuts.

Yet allowing entitlements to continue on their current path guarantees a sustained squeeze on the discretionary spending programs such as education that invest in future generations. In 1969, according to Office of Management and Budget figures released this week, payments to individuals (primarily entitlements) and investments in the future (defined as education and training, scientific research, and infrastructure) each constituted about one-third of the federal budget. By 2012, payments to individuals had reached 65 percent of the budget—and investments had plummeted to just 14 percent.

The Urban Institute, a nonpartisan think tank, calculates that Washington now spends seven times as much per senior citizen as it does per child. With the senior population expected to double by about 2040, these pressures will only intensify. “One of the great tensions of this budget debate is the pull of the two generations,” says Simon Rosenberg, founder of NDN, a Democratic advocacy and analysis group. “We have to both provide for the retirement of a very large baby-boom generation while also investing in the largest [millennial] generation that has ever come along. And it’s hard to do.”

The increasing number of seniors means that federal spending, measured as a share of the economy, will inevitably rise in years ahead—and that means the government will need more tax revenue. But the same changing demography also means that unless Washington restrains entitlement spending, it will saddle young people with unsustainable taxes or debt, or slash the investments in education and health that benefit them, or both. “We want the [retirement] programs to exist, because we see them as being vital,” says Matthew Segal, cofounder of, a group that advocates for millennials. “But we also want long-term solvency and realize there is going to be a tremendous tax burden on us if they are not reformed. When the Far Left [says everything] is off the table, that’s the same strident conversation that you see from the tea party.”

For Democrats, the reflexive resistance to entitlement reform is questionable not only economically but also politically. By prioritizing entitlements over discretionary spending, they are favoring the predominantly white senior population, which cast about three-fifths of its votes for Republicans in last year’s presidential and congressional elections, over the diverse millennial generation, which voted about three-fifths Democratic on both fronts. “Obama is ahead of his party on the future of the coalition,” Rosenberg says. The president’s budget could threaten congressional Democrats in the 2014 election if Republicans, obscuring their own Medicare and Medicaid plans, rally seniors against his entitlement proposals, as some GOP House leaders have already signaled. But Obama’s positioning could help Democrats deepen their grip on millennials, who will approach one-third of eligible voters by 2016.

Obama has already taken a rare step to respond to the budget’s generational imbalance with his health care plan, which slows the growth in Medicare spending to fund expanded coverage for the working-age uninsured. Now, the president’s nascent cut-and-invest budget approach threads between liberals who would spare all entitlements and conservatives who would retrench investments and entitlements alike. The most trenchant criticism of Obama’s budget is that it does too little, not too much, to redirect government’s focus toward the next generation. But even with this careful first step, Obama is pointing toward an overdue rebalancing of Washington’s priorities from consumption to investment—and from the past to the future.

Ronald Brownstein is the Editorial Director of the National Journal.  This article appeared in the Saturday, April 13, 2013 edition of National Journal.

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