Senate Republican Budget Leads from Behind Obama on Medicare

Obamacare by from Washington Examiner, March 19, 2015

The true test of whether Republicans are committed to limiting the size and scope of government is whether they are serious about reining in spending on the nation’s unsustainable entitlement programs. Unfortunately, the Senate Republican budget released on Wednesday fails that test.

Republicans, historically, have disappointed limited government advocates when it comes to reforming programs such as Social Security, Medicare and Medicaid. Conservative icon Ronald Reagan failed to make a dent in entitlement spending, though at least he had the excuse of a Democratic-controlled House of Representatives. When Republicans last had unified control of the White House and Congress, President Bush used it to muscle through the largest expansion of entitlements since Lyndon Johnson’s Great Society. Lacking offsetting spending cuts, Bush’s Medicare prescription drug plan added trillions to the nation’s long-term entitlement deficit.

There was hope that the Republican fear of touching entitlement programs would change after the Tea Party revolution of 2010, which brought more attention to the grim future that awaits the younger generation of Americans if current trends continue.

In 2011, the newly-elected House Republicans took an encouraging step by passing a plan to overhaul Medicare by then Rep. Paul Ryan, R-Wis., an indication that Republicans were willing to take on what is often described as a “third rail” of American politics. His successor as Budget Committee, Georgia Rep. Tom Price, has also proposed a version of this type of reform in the House Republican plan released on Tuesday.

But on the Senate side, it’s a different story. Budget Chairman Sen. Mike Enzi, R-Wyo., released a timid budget, that’s short on details and heavily reliant on accounting gimmicks.

To be sure, the Enzi plan does propose to convert Medicaid into a program that would provide more flexibility to states by block-granting funding, which would be a positive reform. But the proposal is otherwise discouraging.

The budget tables accompanying Enzi’s plan promise $4.3 trillion in savings to so-called mandatory programs, but there isn’t a detailed breakdown of where all of those spending reductions are coming from.

The Senate budget outline, declares, “The Social Security program is on a track to bankruptcy. This threatens millions of current and future retirees with across-the-board benefit cuts.” But instead of trying to avert a crisis, the outline offers an invisible Band-Aid in the form of a vague promise to reduce spending in “other areas to fully offset Social Security’s rising deficits…” Ultimately, the plan “encourages the President and congressional leaders to act to protect Social Security.” As the kids might say: LOL.

On Medicare, the Enzi budget would lead from behind President Obama. Obama, in his own budget, proposed around $400 billion in reductions to projected spending on the program. Enzi’s plan would use “the total amount of proposed net Medicare savings in the President’s budget as a target, but allows congressional committees to work with beneficiaries and other stakeholders on the best ways to save the system and stave off insolvency.”

The program also promises to extend the lifespan of Medicare by five years, but only by diverting cuts to Medicare made by Obamacare. Which raises another issue — that Enzi’s proposal tries to have it both ways on the Affordable Care Act.

Obama’s signature healthcare law was designed to have a lot of spending ($1.7 trillion by the latest Congressional Budget Office estimate) offset by lots of taxes and reductions in Medicare spending levels. Enzi’s budget would repeal Obamacare, which would mean getting rid of its tax increases and Medicare cuts as well.

But Enzi takes the $1.7 trillion in savings from eliminating Obamacare’s exchanges and Medicaid expansion, but still depends on its Medicare cuts to extend the solvency of the program and assumes tax levels will be just as high after Obamacare is repealed. So Enzi’s big plan involves keeping tax levels as high as they would be under Obamacare, even though he doesn’t specify which new taxes he’d want to pass to make up for the ones he’d be eliminating.

If current trends continue, “mandatory” federal spending on entitlement programs will gobble up more than three out of every four dollars collected in taxes, according to the CBO. And things get even worse from there — with public debt eclipsing the projected economic output within 25 years and continuing to grow after that. “With deficits as big as the ones that CBO projects, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable,” the office wrote of the long-term budget outlook.

Budget documents, to be clear, merely offer a vision. Spending is actually allocated through the appropriations process and any broader reforms to entitlements would require separate legislation.

However, budgets are an opportunity to communicate where a party wants to take the country. In past years, Republicans made progress in rallying around a plan to reform Medicare. But with Republicans having to defend a lot of Senate seats in 2016, they clearly made the calculation that they didn’t want to make it any easier for Democrats to demagogue the Medicare issue. But if Senate Republicans are afraid to defend sensible entitlement reform during campaigns, they’ll never have the guts to implement it when elected. Sadly, such political cowardice has devastating consequences for future generations.

© 2015 by the Washington Examiner. Reprinted with permission.