Political Parties Refuse to Cooperate to Resolve Nation's Growing Debt

Published Dec 30, 2013. By Jack Torry.

WASHINGTON — One party refuses to raise taxes. The other party refuses to restrain the growth in Social Security and federal health programs.

During the next decade, the federal government is projected to continue piling up hundreds of billions of dollars of debt, which economists fear will inflict grievous damage on the U.S. economy.

But just as alarming, many analysts say, is that the president and lawmakers might not show the political will to either raise taxes or restrain the growth of Social Security or the federal health programs of Medicare and Medicaid. Those entitlement programs make up more than 60 percent of the federal budget.

Instead, analysts fear that lawmakers will continue to scale back federal discretionary spending, which is what the government spends every year on education, housing, criminal justice and national defense.

In essence, Washington will pick on the kids instead of trimming benefits to older — and, in some cases, wealthier — Americans.

“The combination of not raising taxes and not cutting the largest programs does put the rest of the budget under squeeze,” said Julia Isaacs, a senior fellow at the Urban Institute, a nonpartisan public-policy organization in Washington.

Joel Packer, executive director of the Committee for Education Funding, said, “It’s like World War I trench warfare, where the Republicans are deeply dug in on no new taxes and Democrats — although not as united — have been pretty firm about no cuts to Social Security, Medicare and Medicaid.

“All the cuts that have happened in the last three years have come out of the discretionary portion,” Packer said. “To use my World War I analogy, we’ve been in no man’s land where all the bombs are falling.”

A good example is Head Start, where federal money for the preschool program largely for 3- and 4-year-olds in Ohio has essentially been flat for the past two years. At a time when President Barack Obama has proposed spending an extra $75 billion during the next decade to provide high-quality preschool for every low- and moderate-income 4-year-old in the country, only about 30 percent of those children are in a qualified preschool program.

A 2013 study by the Urban Institute shows that while federal spending is projected to increase by $1.2 trillion during the next decade, only 2 cents of every dollar of that increase will be spent on children.

“Early education has been studied to a greater extent than K-12 education, and the way I read the evidence, you do get a good return on your money in high-quality center-based care,” Isaacs said. “There are poor-quality programs where you wouldn’t want to send your children. (But) these high-quality programs are a good investment.”

Nor is there any sign that Obama and Congress will agree on a solution any time soon. A two-year budget compromise that won congressional approval this month essentially avoided the difficult decisions on Social Security, Medicare and Medicaid and continued the uneasy truce between the two parties to hold down spending in other programs.

Some Democrats, such as Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts, are backing bills that would expand Social Security payments by $70 a month to many beneficiaries while calling on upper-income Americans to pay higher Social Security taxes.

“This whole debate in Congress now and on a lot of talk shows is how much do we cut Social Security,” Brown said. “You don’t go after these programs. You find a way of responsibly paying for (them). You find a way to make sure their benefits are a little bit better.”

Brown’s plan is fiercely opposed by those who advocate tightening the budget, with the Committee for a Responsible Federal Budget saying it would “be imprudent and irresponsible to enact broad-based benefit enhancements before the program’s finances are under control.”

In addition, both political parties are preparing for a presidential campaign to succeed Obama, who leaves the White House in January 2017. In 2012, the Republican presidential primaries were dominated by talk of cutting taxes, while Obama and congressional Democrats vowed to avoid any reductions in Social Security and federal health programs.

“You really have the potential of a Democratic candidate promising new benefits and a Republican presidential candidate promising lower taxes,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan Washington organization that pushes for lower deficits.

“This is a very dangerous recipe,” Bixby said. “The next president really needs to have a mandate to do something about our burgeoning debt, and you can’t do that without touching the entitlement programs and getting new revenue.”

Pressure to reduce the deficit has temporarily eased as the annual federal deficit has tumbled from $1.4 trillion in the 2009 federal spending year to $680 billion in the federal spending year that ended on Sept. 30. But the nonpartisan Congressional Budget Office has concluded that without major changes, the deficit will soar out of control in the latter half of this decade.

Among those urging a long-term solution is Sen. Rob Portman, R-Ohio, who flatly asserted that entitlement programs “are unsustainable. Those spending levels cannot be sustained by any tax increases.”

Instead, he wants the government to use means tests for Medicare, which would result in wealthier people either paying higher premiums or receiving smaller benefits.

“We ought to be dealing with these now,” said former Sen. Evan Bayh, D-Ind. “It’s the responsible thing to do. Unfortunately, that’s not going to happen between now and the midterm election.

“It’s going to take a president who decides … this is going to be a part of their legacy because it’s something that needs to be done and can be done,” Bayh said.

Because the deficit is down, there is no sense of crisis, he added.

“It will take presidential leadership in order to get it done.”