When Is a Cut Really a Cut?
As debate begins over where Washington will spend our tax dollars next year, it’s worth paying attention to the language spewing from Capitol Hill and not just to the numbers. Because perhaps no process all year is accompanied by the same partisan disingenuousness as the annual budget argument. And perhaps no phrase is so abused during the debate as that of “spending cut.”
Take, for example, the recent Medicare uproar. As an entitlement program, it runs on autopilot, with spending projected to increase an average of 7.2 percent annually over the next five years if Congress does nothing at all. (By contrast, the entire economy is expected to grow at about 3 percent over the same span.) Bush has proposed to slow that growth by 2.2 percent, meaning 2009 spending would still be about 5 percent above that projected for 2008. Over five years, the difference in growth rates (5% vs. 7.2%) translates into a $178 billion spending discrepancy.
The reaction from Democrats was swift and biting: “This administration ought to know that five years’ worth of Medicare and Medicaid cuts totaling $200 billion are dead on arrival with me and with most of the Congress,” said Montana Sen. Max Baucus (D), who heads the Senate panel that oversees Medicare spending.
Forget, for a moment, that $178 billion magically became $200 billion in Baucus’ statement (rounding is a political expediency, not a crime, on Capitol Hill). The question is: Does the figure really represent a cut if the program would still see funding increases totaling about $100 billion by 2014?
There are nuances here, of course, and the obvious question of priorities. Bush critics point out that the slower growth would target health service providers like hospitals, rather than the insurance and pharmaceutical industries, which have tallied record profits under this administration. (Indeed, the independent commission that advises the health department on Medicare payment decisions has recommended for years that the agency trim back billions in subsidies to some private insurance plans operating under the program — an issue the Bush budget ignores, but one Baucus will take up in the Finance Committee later this week.)
A great deal of scrutiny has also been directed at Bush’s tax cuts — about a third of which would benefit the top 1 percent of earners, and which the president has proposed to make permanent. In the midst of a costly war for which few Americans have been asked to sacrifice anything at all, there’s probably good reason for the criticism. (To be sure, the debate over budget semantics will soon move to address whether allowing the Bush tax breaks to expire, as scheduled in 2011, would constitute tax hikes.)
These are all arguments that must happen. But Democrats — who happen to control Congress at the moment and are widely expected to pick up more seats in November — have a responsibility here that transcends simple criticism of the White House in an election year. In three years, the oldest of the 70 million baby boomers will be eligible for Medicare, which is projected to go bust in 2018. No one thinks it will happen, but to avoid it will require some tough decisions — perhaps even the types of “cuts” the Bush administration just proposed.