There Is No Willingness To Do It

I think that Chris Pope’s plea at City Journal for entitlement reform belongs in the “we just have to” school of public policy thought. Here’s a sample:

After three years of record spending, the federal government will soon face decades of steadily rising entitlement costs. Some Republicans believe that they can force reform by obstructing an increase in the federal debt ceiling, but doing so would more likely force House leaders to accept proposals crafted by Senate Democrats. Yet as interest rates rise and fiscal constraints tighten, the longer-term prospects for entitlement reform become more propitious. Balancing the budget by increasing taxes is even less popular with voters and both parties than doing so by reforming Medicare and Medicaid, because tax hikes would represent a greater disruption to the status quo.

Congress has given up trying to hold the line on Medicare spending. After a decades-long charade of “sustainable growth rates” in Medicare and annual “doc fixes”, Congress gave up. In theory it might raise marginal tax rates on the rich but in practice I believe that increasing revenue by doing so is beyond Congress’s reach. The only group on which it can impose taxes is the middle class and it has refused to do that.

At this point I don’t believe anything will be done by either party until the whole thing goes splat.

3 comments… add one
  • Andy Link

    “At this point I don’t believe anything will be done by either party until the whole thing goes splat.”

    That’s my view as well. Combined with government and political dysfunction, the incentives for politicians are strongly in favor of kicking the can for as long as possible.

  • steve Link

    The average annual increase for Medicare spending for 2010-2020 was 1.9%. That compares with 2.8% for private insurance. That would be considered out fo control and represent Congress giving up? This was much better than the prior 10 years and even better than the 1o years before that.


  • Practically by definition private insurance must be priced above Medicare. Otherwise no one would accept private insurance. As I mentioned in another post, this is a positive feedback loop. As Medicare compensation rates rise, it pushes private insurance compensation rates. As private insurance compensation rates rise, it pulls Medicare compensation rates.

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