Debt Woes Keep Harsh Guidelines Aloft, Forge Unlikely Alliances
A controversial debt panel's advice was initially thought to be heading nowhere fast, but "a surprisingly broad consensus" that action must be taken to avoid a debt crisis has kept negotiators at the table and given the recommendations unexpected buoyancy, The Washington Post reports. "After an election dominated by vague demands for less debt and smaller government, the sacrifices necessary to achieve those goals are coming into sharp focus. Big cuts at the Pentagon. Higher taxes, including those on home ownership and health care. Smaller Social Security checks and higher Medicare premiums. A debate is raging over the size and shape of those changes, particularly the wisdom of cutting Social Security benefits. But a surprisingly broad consensus is forming around the actions required to stabilize borrowing and ease fears of a European-style debt crisis in the United States. As a presidential commission struggles to build political momentum for such a package, even Republicans who initially opposed the commission's creation are still at the negotiating table" (Montgomery, 11/22).
NPR: With Republicans taking over the House, and the president's deficit commission ready to report, the country's two biggest entitlement programs - Medicare and Social Security - are in the cross hairs.
Robert Reischauer, the other public trustee [of Medicare] and a former director of the Congressional Budget Office, also says 'small, measured, phased in adjustments' to entitlement reform are key - if they're enacted over a long period of time. But the growth rates of Medicare and the economy are still too far apart for Medicare to be sustainable, he says. Medicare is growing by about 8 percent a year. The economy has been sputtering along at less than half that. Meanwhile, Medicare's largest fund - the one that pays for hospital insurance - will run out of money by 2029. 'People don't relate to a crisis that's going to occur 20 or 30 years from now,' he says (11/21).
And, the National Journal shows how the deficit issue has blurred political barriers: "One of the Democratic Party's prominent voices on fiscal issues has thrown a hand grenade into the debate over the long-run sustainability of Medicare, the signature Great Society health program for the elderly. Alice Rivlin, the 79-year-old former budget director under President Clinton, has teamed up with 40-year-old Rep. Paul Ryan, R-Wis., the incoming chairman of the House Budget Committee, on a plan to essentially privatize Medicare for those turning 65 a decade from now" (Cohn, 11/22).