Seven Steps to Social Security cuts via Debt Commission

by Bruce Webb

I don’t visit the web-site EconomistMom much because Diane has hinted a while back that I was being rude, and like a good party guest does, took the hint and left. But my eye was caught by the caption and the very nice illustration to this post Yes Deficit Hawks Can Have Their Cake and Eat it Too, decided to drop in and found a conversation between olde acquaintances Bruce Bartlett, Jim Glass and commenter Brooks. I don’t want to copy Bartlett’s exact comment without his consent, so to see it and my reply, you may have to visit. Go ahead, I’ll wait below the fold.
Back now? Good.

For those of you who didn’t go the short version of my comment is that the strategy to get major slashes to Social Security and Medicare takes an Seven Step and that this technique is not new and in fact mirrors the original plan for Bush’s Commission to Strengthen Social Security (CSSS) in 2001-2002.

Step one. Get consensus on ‘Crisis’. In this case that current debt growth levels are unsustainable.
Step two. Get consensus that there are only three possible paths out: revenue increases (A), cuts in military and other discretionary spending (B1 and B2), or cuts to non-discretionary spending, meaning Medicare and Social Security (C)
Step three: Having agreed that some combination of A, B, and C is needed set up a Commission with a mandate to propose an up or down vote.
Step four. Committee decides it is unwise to increase taxes during a recession and eliminates (A). Commission further decides that it is unwise to cut defense spending in the middle of two wars eliminating (B1) and that eliminating infrastructure spending or farm supports is both unwise or politically impossible in the current climate (B2)
Step five. Recommend a package of cuts to Medicare and Social Security-C on the basis of shared sacrifice, after all every CD and State has a share of the elderly population.
Step Six: Tell Congress that the statute doesn’t allow them to revisit A or B and then that NOT voting for a C based solution means denial of Steps one and two.
Seven: Either get a vote for C or run against opponents as ‘Do Nothing Deficit Deniers”

This was exactly the plan used by the Bush Administration in their Spring 2005 Social Security Tour. Rather than produce a Plan already in hand crafted to specifications, say like Model 2 of CSSS, and have people pick it to pieces, they held it back for a later stage. . So the proposed sequence there was:

Step A: Use Social Security Tour to get consensus on Social Security Crisis
Step B: Use tour to assure everyone that all options were on the table.
Step C: Having gotten consensus from Congress try to find some mechanism to assure a final up or down vote.
Step D: Having secured a vote indicate that any plan MUST comply with the seven existing guidelines of CSSS Guiding Principles to CSSS which bar any tax-based solution and mandate private accounts.
Step E: Remind Congress that they promised an up or down vote and that refusal just meant being in denial of what was conceded in step one and two.
Step F: Either get a vote to ‘reform’ Social Security or use a denial to go for a major victory in the 2006 mid-terms.

In 2005 Bush mostly got stopped at Step A. Since his proposal was narrowly focused on Social Security, a ‘There is No Crisis’ narrative WITHIN the Social Security context was able to get traction. This time we are on a very different track, instead of selling this as a proposal for an ‘Ownership Society’ (where the numbers were pretty easily debunked), it is being sold as a matter of ‘Intergenerational Equity’ and ‘Fiscal Responsibility’. And from that starting point Step one is pretty much in the bag and logic gets you mostly through Step two.

Leaving us where? Well we are within a week of a vote on Step three of the first list and if it passes steps four through seven pretty much follow automatically, they may not work but I would hate to have to bet on it. Meaning that we need to stop Step three by convincing people that Step four is already in the bag. So called ‘Deficit Hawks’ strongly overlap with ‘Tax Hawks’ and with ‘Military Hawks’. Moreover they are largely from farm states and not likely to vote for big cuts there. Which really leaves only one question in my mind, do they stop with proposing big slashes to Social Security, Medicare and Medicaid? Or make new runs at Urban Transit, Community Develpment, or (non-military) Foreign Aid?

I suspect they know better than to get too ambitious and will instead just strike at Entitlements as such.

A last note on Bartlett who revealed too much. In noting that while open to tax increases in principle history showed that while Congress couldn’t help cutting future tax increases back (as with AMT), both Congress and people allowed the benefit cuts in the 1983 Reform to occur on schedule. Since future wage working retirees actually decided to go along with that for the general good while the wealthy would predictably resist paying taxes for that same general welfare that we should just go with the benefit cuts. Because they were ‘doable’.

So workers are ‘doable’. Which puts us ‘working guys’ into a whole new category, except in this case we are paying the Johns.

(Original proposed title: The ABCs of BOHICA)