Muzzled (16 page)

All the wizards and their distracting tricks of political spin cannot hide the fact that politicians on every side—Republicans, Democrats, independents, Tea Partiers, and socialists—feed at the federal trough. They brag to their constituents about “bringing home the bacon” from Washington. They put earmarks on legislation for personal projects such as the infamous “bridge to nowhere” in Alaska. Then, during campaigns, they shamelessly attack one another over high taxes and endless spending. All the candidates tell the voters their hands are clean, while blaming the other side for the huge yearly budget shortfalls that add to the debt, create financial burdens for future generations, and create the risk of inflation and overall economic instability. It is great political theater, but our tickets to this production are ruinously expensive.

The biggest share of all federal spending, other than
domestic programs, is military defense. Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said last year, “The most significant threat to our national security is our debt.” He explained that a country in financial free fall is not able to support a powerful military. “The strength and the support and the resources that our military uses are directly related to the health of our economy over time,” Mullen said. His thinking is based on the fact that the United States spent close to 20 percent of its national budget on defense last year. That $664 billion defense budget was more than the combined budgets of the world’s next twenty largest militaries.

Yet anyone who questions excessive defense spending, including the Joint Chiefs and former defense secretary Robert Gates, is condemned as weak on national defense, willing to risk the lives of brave soldiers, and sorely naive about the Chinese threat. The truth? Senators and congressmen will use any argument to protect funding for military bases in their home state. They fiercely guard money to defense contractors doing business in their home state. In several congressional districts a military base or a military contractor is the largest employer. Major defense contractors also fund political campaigns through their political action committees. When it comes to spending money on fighting wars, politicians know they can sign a blank check and pay no political price. In fact, they can claim to be patriots and expect laurels, even as they drive up the debt and put financial burdens on future generations. The most glaring recent example is the Bush administration’s decision to censor the cost of the wars in Afghanistan and Iraq. The administration never disclosed it. The wars were paid for
with deficit spending, off the books, with no accountability for how the money was spent. The Obama administration has revealed some of the cost but not the full amount. So far it is estimated to be more than five trillion dollars—over one third of our total debt.

With the red, white, and blue razzle-dazzle insulating the defense budget from any serious cuts, any discussion of reducing federal spending turns to America’s two largest domestic spending programs, Social Security and Medicare. Again, the politically correct thinking that shoots down any cuts in defense spending also tends to throw up a Teflon defense against suggested cuts to Social Security and Medicare. Anyone mentioning reducing Medicare costs is charged with taking money from ailing seniors. Anyone talking about limiting benefits is denounced for attempts to create “death panels” or “kill Grandma.”

Social Security is the government’s single biggest domestic spending program. It consists of two entitlements. One is for retired workers and their dependents or survivors. The second is disability insurance for people younger than retirement age who are unable to work and their dependents. In 2009 Social Security cost the government about $670 billion, or 15 percent of all federal spending. Over fifty-nine million Americans currently get Social Security benefits. And with the large number of baby boomers retiring in the next two decades, more than 20 percent of the nation will soon get a Social Security check. The Social Security Trust Fund currently has enough money to pay its bills, but according to congressional budget experts the fund began running a deficit in 2010 that will empty its pockets by about 2037.

The second-largest share of domestic spending goes to Medicare, health-care subsidies for the elderly. It cost the federal government over $500 billion in 2009. According to CBS News, over 10 percent of that amount, about $55 billion, was paid to doctors and hospitals to keep patients alive during the last two months of their lives, “more than the budget for the Department of Homeland Security, or the Department of Education.” The report found “20 to 30 percent of these medical expenses may have no meaningful impact [on the patient’s health or longevity]. Most of the bills are paid for by the federal government with few or no questions asked.”

Together Social Security and Medicare make up 33 percent of the annual federal budget. With Medicaid, federal health care for the poor, entitlements account for about half of the budget. Those programs have to be cut if there is any genuine interest by politicians in reducing the federal debt. But as Congressman Paul Ryan and the Republican Party discovered, with their plan to trim Medicare and drastically cut Medicaid to pull in six trillion dollars in revenue over the next ten years, it is risky for a politician to open the door to charges of trying to kill Grandma by asking politically incorrect questions that challenge spending on people who are elderly, sick, and dying. Seniors vote in large numbers and they control a disproportionate share of the nation’s wealth. They contribute to political campaigns, write letters to the editor, and volunteer to work on political campaigns. AARP, the seniors’ lobbying group in Washington, is the largest lobbyist in the nation. And then there is the bizarre attack by seniors and their lobbyists on anyone questioning ever-escalating Medicare and Medicaid spending. The same seniors who lament
big government and the spread of socialism act as if Medicare has nothing to do with big government and socialism. In fact, seniors object to attempts to reform Medicare as big-government disruption of the privacy of the doctor-patient relationship.

The simple truth is that the federal government has been at the center of the doctor-patient relationship as long as there has been Medicare. Medicare’s size and national reach over doctors, hospitals, HMOs, drug companies, and rehabilitation centers puts the government in control of health-care prices and policy. Call it what you will, but Medicare and Medicaid amount to a “government-run” program and by all definitions a socialist program. President Obama has told the story of getting a letter from a Medicare patient who wrote to him to say she did not want government-run health care or socialized medicine and then added: “And don’t touch my Medicare.” At a town-hall meeting held by Republican Robert Inglis of South Carolina, a senior asked the congressman to “keep your government hands off my Medicare.” When the Republican pointed out that Medicare is paid for and run by the federal government, the senior citizen countered that “he wasn’t having any of it.”

It is a politically inconvenient truth for that man in South Carolina because it does not fit with his anger at big government. But the truth it is. Without limits on Medicare, the program is taking the government on the path to insolvency by driving up the deficit and creating pressure for higher taxes.

The unaddressed issue at the center of every debate about Medicare, Medicaid, and Social Security is to what extent
the federal government should be involved in providing social services to its citizens. Are those services necessary as a mediating force, a safety net against the excesses of a free-wheeling capitalistic society where people can fail, go bankrupt, get sick, get old, be hurt by the corruption on Wall Street and abuse of others? Or is fear of failure a sharp spur to hard work, competition, and retirement planning? And what about the futures of those who have failed and become street beggars, criminals, and the homeless? What about the blameless children of the poor, whether their parents are irresponsible people or simply the victims of layoffs, poor education, or a medical catastrophe (the biggest cause of families filing for bankruptcy)? What about orphans and widows?

Republicans have tried to argue that Democrats’ efforts to expand the social safety net are misguided adventures in socialism that encourage dependency. And yet Republican presidents, too, from Nixon to George W. Bush, have presided over large expansions of entitlement programs. Conservatives’ posturing against entitlement spending is not in keeping with the truth about their actions when they are in power and seeking votes. They can’t seem to have an honest conversation among themselves, let alone with the nation as a whole.

Democrats often try to close off the debate by dismissing critics of social programs with self-righteous screeds in which they portray themselves as defenders of the poor. They remind us that even the strongest, brightest among us are subject to the fortunes and misfortunes of life, from professional failure to devastating disease, injury, and, of course, old age and death. The Democratic base of unions, racial minorities, single women, and young people without houses and investments has
every reason to try to slap aside any discussion of the limits of government help to those in need.

With neither side willing to compromise on the extent of the government’s role in providing a social safety net, for fear that it might lose money or political advantage, political paralysis has taken hold on a topic of critical importance to the nation. For a long time, politicians simply told one another that Social Security was the “third rail of American politics,” something to stay well clear of. For the first time, with the national debt becoming front-page news, that is beginning to change, but there’s a long way to go.

However, the cone of silence over Social Security spending is enforced by the votes of the senior citizens who get Social Security benefits. According to the Center for the Study of the American Electorate, people over sixty-five vote “at a rate of about 60 percent more than young people and about 10 percentage points higher than the national average.” Even ardent Republicans such as Tea Party members who oppose deficit spending and big government find a way to defend Social Security and Medicare spending. And as concern has grown about the fiscal instability of the Social Security and Medicare system, seniors have become more politically active in its defense.

In the 2010 midterm elections, one of the reasons seniors voted in record numbers against what Republicans labeled “Obamacare” was concerns about cuts to Medicare and Social Security. The result? Voters over age sixty-five gave Republicans an unprecedented twenty-one-percentage-point advantage over Democrats in those midterms.

“This is the first time in modern history that older people had their vote influenced by what is going on with old age
benefits,” said Robert Binstock of Case Western Reserve University in Ohio. In the past, the political priorities and voting preferences of the elderly were much like those of every other voter.

The power of the senior lobby to protect its entitlement benefits was first hinted at during President Bush’s effort to reform Social Security in 2005. After winning his second term, President Bush proclaimed that he intended to use his political capital to reform Social Security to ensure its financial stability. Having been elected to a second term, President Bush risked challenging senior voters by starting a conversation about the ailing Social Security system.

His political advisers saw a possible political windfall in the effort. They told me they hoped to win the gratitude of senior voters by ensuring the solvency of their central retirement plan. Their goal was to make the senior vote the cornerstone of what they called a “permanent Republican majority.” The Bush White House also hoped to make inroads with blacks, a voting group strongly aligned with the Democrats, by making the case that the current Social Security system cheated blacks. In his memoir, the president later wrote: “Because their life expectancy was shorter, black workers who spent a lifetime paying into Social Security received an average of $21,000 less in benefits than whites of comparable income levels.”

The key to the Bush administration’s plan was to shift a portion of each worker’s Social Security money into a private savings account where it could be invested and benefit from market gains. He unveiled the plan in grand style during his State of the Union speech. Within months the plan was doomed. The AARP, which had helped President Bush
win votes in Congress to expand Medicare drug benefits in 2003, quickly distanced itself from the president. Democrats attacked the Bush reform plan as an effort to “privatize” the New Deal entitlement. Labor and civil rights groups opposed it as a plan that helped the rich while exposing retiring workers and minorities to the risky ups and downs of the stock market. Polls showed young people lacked enthusiasm for the reform effort because they did not believe the program had the financial strength to survive long enough to offer them benefits.

Politically correct thinking carried the day, and to the delight of the critics, President Bush’s plan was defeated and the conversation quickly died. It provided a clear warning to other politicians that the only acceptable, politically correct posture on Social Security was to leave it alone, despite rising life expectancy, ballooning health-care costs, and huge budget deficits.

The cautionary tale of Social Security reformers is a sign of the danger awaiting both parties if they broach the subject of the runaway cost of Medicare. One of the reasons President Obama and the Democrats suffered a record loss of congressional seats in 2010 for proposing health-care reform was that it included cutbacks on Medicare benefits available to people over sixty-five. That power to punish would-be reformers is growing as the number of seniors increases from the current 13 percent of the population to a projected 20 percent by 2030. Historically, Democrats, as heirs to the Roosevelt and LBJ legacies of creating entitlement programs, have scored better than Republicans when senior voters are polled on which party is more trusted to protect Social Security and
Medicare. But the Democrats lost much of that advantage by advocating health-care reform.