In the wake of the 1987 stock market crash, a wise and wily Wall Street executive told his troops “change only comes through pain and agony.” By bringing a healthy dose of “pain and agony” to Washington, sequestration will introduce some sanity to the Federal budget. It may seem modest to workers who have already endured years of pain in the corporate sector, but sequestration does alter the budgetary calculus.
Inside the beltway, consensus “thinking” has been: “Everyone knows that the budget deficit is being driven by entitlements, not discretionary spending. But we can’t cut entitlements because seniors vote, so we can’t cut Federal spending.” The equally illogical corollary was, “We don’t need to set priorities; we’ll just spend more on everything next year.”
That all changed with sequestration. Suddenly, the special interests that feed at the Federal trough—potent Democratic interest groups such as universities, government workers, scientists, and community organizers — are facing real cuts, relative to what they expected to spend. They’re asking their rich Uncle Sam, “Why are you cutting my budget while leaving Medicare, Medicaid, and Social Security untouched? My work is so much more important to the country than ever-expanding entitlement programs riddled with waste.” The next step is obvious – entitlement reform.
Exhibit A is an open letter by Princeton University President Shirley Tilghman on “The Cold Wind of Sequestration,” which was published in the alumni magazine. You can almost feel the pain as she denounces sequestration as:
…a bludgeon, subjecting both civilian and defense programs to indiscriminate reductions of roughly one trillion dollars over the next 10 years. Not only does this approach unfairly target areas of spending that constitute only a third or so of the federal budget, it also fails to differentiate between programs we can reasonably curtail or eliminate and those that are essential to our nation’s future. Among the latter are investments in higher education and fundamental research. [emphasis mine]
“Curtail or eliminate” programs? “Unfair” to leave entitlements unscathed? She sounds more like Paul Ryan than Barack Obama (for whom just about every Princeton employee voted). A couple of things will intensify the pain. This spring Republicans in the House will hold out for yet more cuts in return for raising the debt ceiling—one dollar of cuts for every dollar increase in the ceiling. And yet another entitlement – Obamacare – starts to squeeze discretionary spending next year. A military incursion in Syria or Iran could also be costly.
Look for universities and other interest groups on the left to discern the wisdom of setting priorities and putting a brake on the mindless, remorseless, unmanaged, automatic expansion of Medicare and Medicaid. Everyone, including most Democrats, knows that their costs are inflated by fraud, unnecessary medical tests, lack of means testing, absence of price incentives, etc. While I don’t deny that medical inflation is hard to control, there is plenty of low hanging fruit to be plucked once Democrats realize that Federal dollars are a scarce resource. There’s also a straightforward Keynesian argument: unlike cuts in current discretionary spending, entitlement reform reduces the deficit gradually without cutting government spending in today’s weak economy.
Copyright Thomas Doerflinger 2013. All Rights Reserved.
