Wednesday, April 13, 2011

Why the Budget Fight Was Meaningless

We just witnessed a potential budget fight that nearly stopped non-essential Federal government spending to a standstill.  Why it was a farce, and the reason that women can picture how ridiculous the cuts are.

Our Spending Pie Chart

We've probably all baked a pie.  We've certainly all served a piece of pie.  We absolutely know how to cut one half.  If we cut a sliver from one of those halves, the piece that is left, almost 40%, is about the amount we spend on Social Security, Medicare and Medicaid.  That's a very, very big piece.

If we cut the other half of the pie in half again, we have a quarter of the pie.  That's what we spend on Defense, including Homeland Security.  That's a pretty big piece as well.

Did we cut anything from these two pieces that are almost 2/3 of the pie?  Not a cent.

Instead, we shaved crumbs off of tiny little pieces and called it a victory.  It was not, for either side.

The Sacred Cows

It is considered political suicide to discuss changes to Social Security - 40% of our spending, for 13% of our population.  No matter that:
  • In 1950, 16 workers contributed for each retiree; now there are 3
  • In 1950, life expectancy was 68 (just over three years payment from age 65); now it is 81 (15 years payment from age 66), yet we moved the full retirement age up only by one year)
Each retiree is supported by only three people for an extra fifteen years.  What sane person would NOT propose changes to this program under these circumstances?

The answer, of course, is any politician, whether conservative or liberal.  Instead, both sides suggest ideological arguments that play to their base.  Both have good ideas, but neither side acknowledges that.  Instead, both point at the weaknesses in the other's plans.  And neither even brings up social security.

It's not that hard.  Take a listen, and see if you can live with this change to Social Security.
  1. Changes won't affect anyone currently receiving benefits.  The age for whom changes will be made can be set at 55, or even 50.
  2. Full retirement would be raised for those at the set age and below on a step basis.  For instance, if you're 50 - 55, full retirement age is 67 (one year older than it is now).  For those who are 45 - 50, full retirement is 68.  For people who are 40 - 45, full retirement is 69.  For 35 - 40, full retirement age is 70. 
  3. Means testing will be in effect for those who's Adjusted Gross Income is $250,000 or more at full retirement age.  Hopefully, we can agree that, at some level, we can afford to forgo our benefits for the long term sustainability of the program.
That seems reasonable to me.  Does it seem reasonable to you?


Much has been made about the repeal of Patient Protection and Affordable Care Act.  It's too expensive.  Wrong and right.  It should not be repealed.  It should be made more cost effective.  Again, read on, and see if you can live with this change to health care reform.

Everyone knows that health care costs have been rising unsustainably, and our collective medical condition does not reflect the amount we pay.  To address this issue realistically, two goals must be accomplished.  First, health care coverage must be universal.  Romney's Massachusetts plan addressed that well.  Second, after universal coverage, costs must be contained.

Those that want to repeal the bill would be far better served by amending it to assure cost containment.  Otherwise, the country will continue to have rising costs, either for those who have coverage, or for those who use expensive and inefficient alternatives, such as emergency room coverage.  That's clearly unacceptable.  So fix the bill.  Make it cost effective.


Cutting educational funding is insane.  In a highly competitive global environment, an educated work force will assure our economic viability.  We all know where we stand in the world rankings for education, and we all know it's not good.

Much has been said about accountability in the educational system, yet the unyielding teacher's union mandates seniority over accountability, saying that a "one size fits all" measurement is impossible.  I disagree.

Every person who performs a function in a capitalistic society should be paid on a merit basis.  Why would it be so hard to test children at the beginning and the end of the year and measure progress over a period of time?  If some teacher's students show little or no improvement, should they not be replaced?


These suggestions would save far more than have been proposed thus far.  No suggestion is mean-spirited, ideological or particularly difficult.  They are, however, inconsistent with either major political party.  There lies the difficulty.

With politicians so unwilling to compromise, true deficit reduction is likely to be a battle of the ideologues.  Most of us are not ideologues.  And we are, sadly, poorly represented.

Anyone who knows how to slice a pie can see that.

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