Friday, February 18, 2011

The Strategy to Begin Balancing the Budget

Entitlements are the 800-pound, beer-chugging, Angel Dust-snorting, psychotic gorilla in the room. It may be too late, but people are beginning to get a little nervous. Because of their size, we all know that entitlement programs, such as Social Security, Medicare and Medicaid must be addressed if we are to balance the budget. The question is: Will Congress do so?

Even minor changes in Social Security, though, have met with surprising resistance from politicians on the left and from recipients. Some sensible suggestions phase in minor changes and don’t affect anyone within 10 years of retirement and affects no current recipients. The overblown reaction to such suggestions are emotional rather than logical, and this must be taken into account.

I am convinced that Americans will accept changes to entitlement programs if – and only if – they are convinced that all other measures have been undertaken. So while entitlement benefit payouts must be reduced, but only after other programs have taken their hits.

Before taking on Social Security, Medicare and Medicaid; Republicans in Congress should work to eliminate the Department of Energy, the Department of Education, Fannie Mae, Freddie Mac and that’s just a beginning. Funding can be eliminated or reduced, for Obamacare, the Corporation for Public Broadcasting, the Department of Agriculture, the Department of Defense and others.

If the GOP-led House fails to accomplish this, then the burden shifts to the Democrats. Republicans can even, somewhat believably, claim that transfer payments might have taken a lighter hit if the other cuts had not be stone-walled by Democrat legislators in the US Senate.

If these cuts or eliminations are made, then the recipients of transfer payments will know that the task of balancing the budget won’t be completely on their backs. They will also understand that the current fiscal problems are, indeed, serious. For that reason, these other programs must go first, even if they are a lesser part of the deficit.

Interestingly, it has mostly been the Democrats that have accused Republicans of making “meaningless cuts” – small cuts that the Democrats could have made when they controlled both bodies of the legislative branch and the executive branch. Democrats are challenging Republicans to take on transfer payments by minimizing other GOP-suggested cuts. These accusations also go along with a strategy that some have openly accused the Democrats of undertaking.

President Obama’s suggested budget was described in newspapers as everything from “not serious” to “a joke” partly because it failed to address entitlement spending at all. Obama has been accused of playing political games with the deficit; almost daring Republicans to address transfer payments. The theory is that whatever changes the Republicans suggest, Democrats will accuse Republicans of “putting Grandma on a 9 Lives diet”.

My belief is that if Republicans follow my suggestion and eliminate money-pit federal programs first, the Democrats' high-level hypocrisy on the budget will stand starkly highlighted against a background of self-serving demagoguery. If that happens then the corrections to entitlement spending has a chance to be made law.

The 800-pound gorilla won’t go away until he is dealt with properly, but the political game of “Economic Chicken” needs to be made meaningless first. The only way to do that is to address other spending cuts first and to do so brutally.

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