I’ll be honest. I really did think that Republican legislators would at least continue to pretend that tax reforms were just about trying to improve the economy…for a BIT longer. I mean, I knew what was really happening. The tax reform bills that are currently in the process of being passed (still possible they won’t be, but don’t count on it) are a bad idea on their own, as I noted previously. Many have wondered why it is being rushed through without proper vetting. Part of the answer has to do with budget reconciliation, the process by which it is being passed (in order to avoid being filibustered by Democrats). But there is also some urgency to get it into this coming year’s tax code, in order to set up a run at getting rid of social security and Medicare.
But don’t take my word for it.
Paul Ryan has just admitted that the next move is to reform “Entitlements”. I use scare quotes there for a reason. When you label programs like Medicaid, Medicare, and Social Security ‘entitlements’, they sound undeserved. You could label them as ‘rights’, or as ‘safety nets’, or as ‘positive liberties’. Each of these labels would be accurate and basically neutral in approach. Perhaps ‘rights’ would imply a bit of necessity that isn’t warranted, due to confusion people have between natural rights (e.g. self defense) vs. political rights (e.g. public libraries). Still, one can argue about what rights people should have. ‘Entitlements’ sounds like someone is getting away with something sneaky. In this case, though, that someone is the GOP.
Trump was elected in part under the premise that he was not going to get rid of social security or Medicare. Many of his voters love these programs, which they absolutely see as earned by a lifetime of working for this country. I agree with them. However, the Baby Boomer generation is reaching a point where they will drain both programs at an alarming rate. They outnumber the generations that follow them, which will lead to a huge surge in spending money on people who are no longer part of the work force. In this sense, Ryan has a point. We have to look at options on how to solve this problem.
But this is where the trick was played. By lowering taxes first, Congress will create a deficit of well over $1trillion. In other words, the government will be spending more than it is bringing in during each fiscal year. This increases national debt, and the deficit has long been a concern of conservative politicians, or least that’s what they claim. So one might wonder why they would pass a bill that raises the deficit by this dramatic of an amount.
The answer is simple. They can then justify spending cuts in order to ‘balance the budget’. Of course, the budget will be completely unbalanced due to their own tax cuts. The real goal all along was to slash government programs. They couldn’t do this first, however, because people would complain. Instead, they will fabricate a budget crisis (which might have happened anyway, as I noted, since we do have an increasing number of elderly citizens) by exacerbating the deficit to the point where something must be done. They will then claim that they must, reluctantly, cut spending to “entitlements” in order to prevent the government from going bankrupt. The alternative is government shutdown, which no one wants.
It’s not a particularly clever strategy, but it will work nonetheless, because most Americans don’t pay much attention to politics. I mean they hear about the scandals, and if it is from the side they didn’t elect, they will express grave concern or some version of ‘politicians are all terrible!’. If it is on their own side, they will question the accusers enough to remain satisfied that their politicians are still the lesser of two evils, and at least they aren’t the other side!
What they will not notice is that Congress played them in a long game of switcheroo (or insert your favorite word for a scam that uses misdirection as a key component).
I’m not the only one seeing this, of course. I started working on this article on December 6th or 7th. Here’s an article from the 8th from the New Yorker observing the same thing. Anyone who has paid attention to the goals of people like Paul Ryan have known that this is coming. It’s been Ryan’s dream to eliminate the welfare state. Again, on one level, I get it. You don’t want people dependent on handouts. However, both statistically and anecdotally, this doesn’t happen as often as some think. We have studies on abuses of welfare, since it’s kind of a big political issue. Families in the system aren’t outspending those who aren’t, despite the myth that welfare somehow affords people a good life. Food Stamps are heavily monitored, despite the focus on stories where someone dares to buy lobster with them or something.
There are counters to the points made above. Here’s one from Forbes, for example, arguing that there’s a lot of abuse of the system. When you look at the arguments, though, they focus on cases where disability benefits were awarded with “insufficient or incomplete” evidence. That doesn’t mean the person didn’t need the benefits. It means the courts didn’t gather enough evidence first. The article also focuses on how few of these beneficiaries return to work, finding the low number alarming. Given that disability benefits often require 2 to 4 years of being turned down, appealing, being turned down again, and appealing again, many of the people who are awarded benefits have disabilities that have prevented them from working for years. They aren’t likely to return to work, because they aren’t able to do so. Unless the writer has a reason to believe these recipients could have gone back to work but didn’t, the argument seems misleading at best.
Anecdotally, I’ve known many people who have tried to receive disability, and the process is time consuming and dehumanizing. It is meant to incentivize you to give up on the process. Having to prove over and over that you are disabled leaves people feeling pretty worthless once the process is completed.
However, I realize that I’m not likely to change minds on this particular issue. You either support safety nets for our society or you don’t (or only do in extreme cases). The point here is that Congress is trying to remove those safety nets, and they are doing it by cutting government income first, so that they can justify cutting the programs.
I often point out that we should not try to create analogies between national spending and household spending. It leads to a lot of misleading distortions. That said, let’s imagine how you would tackle a problem like growing debt in your own life. You know you will have to either increase income or decrease spending. In this sense, the basic analogy between government and households is sufficient for our purposes (not perfect, but close enough to get the point). Which would you do first? What Congress has opted to do is decrease income, first, and then decrease spending later. Note that decreasing income was never one of the options you would have considered. It doesn’t make any sense, UNLESS you are trying to force yourself to decrease your spending by creating a shortfall in income.
That’s basically what is happening here, but the goal is to slash programs that one side of our political system doesn’t like, and has never liked. That’s fine, if they were transparent about the process. But these same politicians promised their voters that they were not going to cut social security. So, watch what happens next!