The Ryan Plan, Simpson-Bowles, 'fiscal cliff', they all have something in common. They claim they are solving the 'long-term' budget problems today. This is like a diet. You can do a 5-day detox or fast, and get some short-term results, but that is not going to fix your habits 10 years from now. There is nothing we can do today that can 'fix' our budgets 10 years out, when future Congresses can undo whatever is done today*. All you need to do is witness the budget situation Clinton left Bush, and then what Bush did with it.
The other aspect of the 'grand-bargains' is that they actually make the budget worse short-term, and it is only far out that they begin to reduce the deficit. That gets at what people really want. What immediately goes into effect in most of these plans - lower marginal tax rates, especially at the top. There are also major entitlement (there has to be a better term) changes, but those only get phased in after 10 years or so. If those changes did not hurt Medicare or Social Security, and they helped the budget so much, why not implement them immediately? So you have tax cuts few want, and benefits changes few want. Why do these plans get any press?
Why also is the pain of today minimized? Extending unemployment benefits is almost an afterthought without talk about the housing bubble, financial crisis, and continued unemployment. I could not imagine many people today saying that the budget deficit is a bigger problem than unemployment. But...Greece! What is Greece's real problem today - it's deficit, or > 25% national unemployment rate, and > 50% unemployment rate for young adults?
There is an obsession that some bill passed today will have far reaching budget-fixing consequences 20 years down the road. I just don't believe that is possible, as for the most part budget-fixing is somewhat painful. Look at the major decisions of the last 20 or so years: Clinton tax increases (quickly undone), Bush tax cuts (partially undone, but only with extreme effort), Iraq war (would supposedly pay for itself), Medicare Rx plan. Republicans frame their arguments as wanting to 'fix the deficit', when they have purely political motives. It would help to have a quick response to turn the discussion before it drives off into the weeds.
*The 'doc-fix' is a great example of this:
The “doc fix” problem dates back to a 1997 law that was meant to cut costs. It gave doctors who treat Medicare patients modest raises for a while, but physicians started protesting loudly in 2002 when it provided for a pay cut. Instead of really fixing the formula, Congress just continually finds short-term solutions.
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