From: The New York Times
Medicare Survival Guide
By DAVID BROOKS
Sometime this summer, the Democrats and the Republicans will go toe-to-toe over whether to raise the debt ceiling. At the height of the confrontation, President Obama may well address the country and say that even though he has offered the Republicans more than $1 trillion in spending cuts (unspecified), the Republicans have not been willing to compromise on a deal. He will then announce that, even without an agreement, the U.S. will still have enough money to continue payments to its creditors.
Unfortunately, he will go on, the government will not have enough money to continue with many other programs. Federal agencies will send out letters advising parents that because of the deadlock in Congress, student loans will be suspended. Other letters will advise seniors to make arrangements with banks for credit lines until their Social Security checks can resume. National panic will ensue.
A few weeks ago, the Republicans might have been able to withstand this. Then it was possible to argue that Americans are so fed up with runaway spending and unsustainable debt that they would support a party brave enough to put the country on a sound fiscal footing. After the Republican defeat in New York’s 26th Congressional District, it is harder to argue that. After these results, 2012 looks more like a regular election — whichever party can be accused of cutting entitlements will get pummeled.
Already many consultants are telling Republicans to drop austerity and go back on offense: Spend 2012 accusing the Democrats of sponsoring death panels. The Democrats will spend 2012 accusing Republicans of ending Medicare. Whichever party demagogues best wins.
But, over the past few days, I’ve spoken with a number of Republicans — in Congress and elsewhere — who don’t want to do that. They fervently believe the country is in peril. They want to find a way to reduce the debt without committing political suicide.
Doing that is a two-step process. First, Republicans have to make a grand offer on raising the debt ceiling. This offer should include a bipartisan commitment to reduce the growth of Medicare spending. Republicans need Democratic fingerprints on a plan to restrain entitlements. In exchange, Republicans should offer to raise tax revenues on the rich. They should get rid of the interest deductions on mortgages over $500,000 and on second homes. They should close corporate loopholes and cap the health insurance deduction. They should offer a plan that follows the outline of the Simpson-Bowles report and what the now “Gang of Five” in the Senate is working on. (Senator Mark Kirk has a proposal roughly on this latter point.)
Democrats may not agree to this offer. Since the election, Democrats have gone into the fiscal fetal position, hoping to offend no one while Republicans catch all the flak. This week, Senate Democrats voted on four separate budget proposals and not a single Democrat voted for a single one. Even President Obama’s budget received zero votes. The Democrats don’t want to be on record for any governing choice that might be painful.
Moreover, President Obama may use this occasion to pummel the Republicans mercilessly on Medicare, no matter what the consequences for the country.
But if the Republicans made an offer that included revenue increases, they would at least show they are willing to compromise to prevent a national catastrophe. And Democrats might take them up on it. Many Democrats understand the fiscal peril. Many Democrats don’t want to go down in history as the people who did nothing while bankruptcy loomed.
More broadly, Republicans need to reconnect with the working class, the sort of people who live in upstate New York Congressional districts. Republicans won in 2010 because the working class fled from the Democrats’ top-down big government liberalism. But these families have seen the pillars of their world dissolve — jobs, family structure, neighborhood cohesion. They understandably reject any new proposals that introduce even more risk and uncertainty into their lives. Republicans need to be the party of order, stability and steady growth.
They need to lay out the facts showing that Medicare is unstable and on a path to collapse, as Representative Paul Ryan is doing. But they also need to enmesh Medicare reform within an agenda to build solid communities: more money for community colleges and technical schools, an infrastructure bank, a values agenda to shore up marriage and family cohesion, tax holidays to help the unemployed start businesses, tax reform to limit special interest power.
The Boston Consulting Group foresees a manufacturing renaissance as Chinese wages rise and workers in low-cost states like Mississippi find they can compete once again. If Republicans can help foster that, and if they can cut a bipartisan deal that illustrates that we are all in this together, they can do good for the country while doing well politically. If not, it’s the same old story: whoever is bravest on entitlements will lose.