Wednesday, February 09, 2005

Partisanship at its Worst

The two hot topics these days, Social Security and the budget proposal, serve to illustrate the crippling partisanship gripping the federal government. There are real problems to be addressed, but both the Bush administration proposals and the Democratic responses are geared almost entirely towards partisan posturing with no apparent concern about results.

Social Security is not in a good state. There really should not be a great dispute about this. It is not an urgent crisis, but neither is everything fine and dandy. The real onset of problems is still years away, but this would be a great time where we could make relatively painless adjustments to get things back on a sound footing before things get too far out of whack. Unfortunately the Bush proposal for private accounts, while interesting, does not really appear to address the real problems. The issue of whether this system should be a pay as you go social welfare program or a government-supported private investment program is a good philosophical question. But for now the immediate problem is that future outlays exceed income. The basic issue is whether we will reduce benefits or increase revenues or some combination of the two. Meanwhile, Democrats, who until recently were willing to discuss and consider this issue, are now locked into deep denial that there is a problem at all. This is a silly tactic when there is, and for some time has been, a powerful public perception that there is a real Social Security problem. At this stage in the game, denial comes off as disingenuous and out of touch. And while both sides are brawling over this on the public stage, nobody is talking about the much larger problem that looms in Medicare.

Then comes the budget proposal which takes the shocking step of reducing 1% of a third of federal spending. We're running record deficits here, such a minor reduction in spending should not be a big deal. Unfortunately these cuts have been precision targeted to produce peak outrage among Democrats. I read somewhere that last year's budget proposed cutting 65 programs, only 5 which actually ended up being cut. Both sides understand how this game is played. The administration wants to come out and say they tried to cut spending, but were obstructed by congress. Congress wants to say that Bush tried to kill all their state's pet programs, but they valiantly save them from the axe.

The disheartening thing is that our long-term budget outlook (including the Social Security and Medicare impacts on the same) is a critical problem, one that I think should be the top priority for the federal government. It's sad to see so much effort spent by politicians, the press, and the public fighting over these issues when it all amounts to sound and fury, accomplishing nothing. And when everyone is exhausted from the fight, these issues will be returned, unresolved, to the back burner to simmer away until they explode into an all-out crisis that will threaten to crash the dollar and destroy the U.S. economy.

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