Americans don't really want spending cuts
The sound of metal on asphalt is becoming painfully familiar to many Americans. It's the sound of the can being kicked down the road by our feckless lawmakers. The latest can to be booted, of course, is that $1.2 trillion in debt reduction the super committee was supposed to have come up with by Thanksgiving. Now, supposedly, an automatic budget ax will drop in a year, cutting $600 billion from defense and $600 billion from domestic spending, most of the latter portion from Medicare.
The less-than-surprising inability of the overhyped super committee to accomplish anything set off the usual snarky headlines and contemptuous utterances from the commentariat. Super failure, some sneered. Why can't our politicians do what the voters sent them to Washington to do?
Many of the pundits have it wrong. Americans did not send their elected leaders to Washington to cut spending — at least not in a meaningful way. And let's face it: The automatic cuts, at least as currently outlined, are unlikely to occur.
Many of the pundits have it wrong. Americans did not send their elected leaders to Washington to cut spending — at least not in a meaningful way.
It's something of a paradox. Any truly meaningful debt reduction plan must include Medicare, Medicaid, and Social Security. Why? For the same reason criminals rob banks: That's where the money is. Entitlements today gobble 41 percent of federal spending, and with baby boomers beginning to retire and living longer, the cost of these programs will almost certainly become unsustainable. No serious deficit reduction is possible without including entitlements. This is a fact, which, as John Adams was fond of saying, can be a stubborn thing.
The politicians understand this. Entitlement reform has been addressed in every major deficit reduction plan put forth in recent years. Simpson-Bowles. Domenici-Rivlin. The Gang of Six. Three panels, three similar conclusions. (Since the super committee — thrown together in a hurry and politicized from Day 1 — issued no formal recommendations, I'm excluding it from this list.) So why hasn't there been meaningful entitlement reform?
The bitter partisan divide between Republicans and Democrats is clearly a major culprit. We all know that. But the media keeps missing another reason, and it is this: Americans simply don't want meaningful cuts. To wit:
• March 3: "Americans across all age groups and ideologies said by large margins that it was 'unacceptable' to make significant cuts in entitlement programs in order to reduce the federal deficit. Even Tea Party supporters, by a nearly 2-to-1 margin, declared significant cuts to Social Security 'unacceptable.'" (NBC-Wall Street Journal)
• April 20: A poll finds that "78 percent oppose cutting spending on Medicare as a way to chip away at the debt. On Medicaid — the government insurance program for the poor — 69 percent disapprove of cuts." (ABC-Washington Post)
• And on July 21, with debt talks between the White House and Republican lawmakers dominating the headlines, a CNN poll said resistance to cuts was even greater, with 87 percent of Americans opposing Medicare cuts, and 84 percent Social Security cuts.
Even after the once-unthinkable downgrade of U.S. government debt by Standard & Poor's, I've yet to see a survey any different than the above. A steady drumbeat of ominous warnings, images of rioting in debt-ravaged Greece — nothing seems to have gotten through. As Erskine Bowles, the Democratic half of President Obama's (largely ignored) deficit reduction commission has observed, America has to have "an adult conversation" about deficits. "The solutions," he warned, "are painful."
Don't get me wrong. Americans understand we're up to our neck in debt. They know cuts have to be made. But this perception is often in the abstract, and when it comes to specifics, the classic NIMBY (Not In My Backyard) mentality rules. We just don't want anything cut that directly impacts us. This is why polls also show things like foreign aid are popular suggestions for cuts; most folks don't know that foreign aid is only about 1 percent of the budget. Another old saw: The triple bugaboo of "waste, fraud, and abuse." No doubt there's money under the cushion here, but not nearly as much as folks think.
Meantime, hard as it is to cut entitlements, what about the other half of the automatic budget ax — defense? Surely that would be easier to cut, right? Perhaps not.
Like the domestic cuts, slashing defense spending would occur through 2021 — based on the ludicrous premise that the next four Congresses would leave the cuts intact. Next four Congresses? The cuts are unlikely to survive even the current one. House Majority Leader Eric Cantor is busy working on a deal to scale back Pentagon reductions, for example, in return for the Democrats getting an extension of both the payroll tax break and jobless benefits for the unemployed.
The broader problem with automatic defense cuts — aside from the impact on security, which is an important discussion on its own — is the impact it would have on jobs. Wily defense contractors have been preparing for this moment for years, sprinkling jobs across all 50 states and most congressional districts, thus making it awfully hard for lawmakers to support cuts.
Some states are particularly vulnerable to this clever form of extortion. Consider Cantor. His state, Virginia — home to both the Pentagon and the world's largest naval base (Norfolk) — is dependent on federal spending for 38 percent of its economy. George Mason University economist Steven Fuller recently told Congress that if the automatic ax were to fall, the state would lose 122,000 jobs. Only a third of these are actual defense jobs; Fuller says the other two-thirds would be jobs supported by defense paychecks: restaurants, shops, and so forth. This kind of job loss would erode Virginia's tax base, threatening its pristine AAA credit rating and designation (by CNBC) as the best state in the country in which to do business.
This is what you might call a dilemma for the anti-spending Cantor. And it's not just him: Fuller estimates that more than a million jobs would be lost nationwide if the defense cuts went through. That's why many lawmakers are fighting them tooth and nail.
Domestic spending, military spending: Do Americans really want their representatives in Washington to cut these in a meaningful way? Sure doesn't look that way. So when does the adult conversation begin?