March 8, 2011

Budget snippings ignore looming crisis

By Jonathan Riskind jriskind@mainetoday.com
Washington Bureau Chief

There is real potential pain for Maine in the budget standoff consuming Washington these days, no mistake about that.

The proposal to replace Memorial Bridge, between Portsmouth, N.H., and Kittery, might not get the $20 million federal contribution needed to match the $38.5 million each that Maine and New Hampshire officials are footing. Mainers struggling to pay utility bills during still-harsh weather might find emergency low-income heating assistance funds slashed. Local communities trying to pay for upgrades during tough economic times might find community development block grant funds cut.

House Republicans are pushing for $61 billion in cuts this year, and they don't seem unhappy to get there a few billion dollars at a time through yet more temporary spending bills, as negotiations continue with the White House and Senate Democrats.

All this short-term pain doesn't really come with much long-term gain, however, not in the context of a budget deficit projected to stay in the $1.5 trillion range and a national debt of more than $14 trillion.

Not in the context of a dispute about how to fund, at this point, more than half of the 2011 budget year, which began back on Oct. 1 and ends Sept. 30.

And not in the context of essentially ignoring what to do about the real long-term drivers of federal deficit and debt: so-called entitlement programs such as Medicare and Social Security, which are getting ever more expensive as baby boomers retire.

Republicans may be full of budget-cutting zeal, but their enthusiasm seems to wane when it comes to tackling entitlements.

President Barack Obama's proposed budget for 2012, all but ignored right now amid the attempt to finally finish this year's budget, doesn't do any better.

The nonpartisan Concord Coalition fiscal watchdog group -- an organization that a couple of New Englanders, the late Democratic Sen. Paul Tsongas of Massachusetts and former GOP Sen. Warren Rudman of New Hampshire, helped found back in 1992 -- calls the budget an "oddly complacent budget for a situation that requires anything but complacency."

Despite the credible warnings of looming fiscal disaster down the road, Obama's budget at best temporarily holds deficits steady at about 3 percent of the gross domestic product by 2017 and public debt steady at more than 70 percent of GDP, which the Concord Coalition notes in a Feb. 22 issue paper is "roughly twice the average over the past 50 years."

This leaves in place "an underlying structural deficit that will push debt to new and unsustainable heights" after 2021. "And to the extent that the budget arouses any sense of urgency at all, it is overly focused on non-security discretionary programs which comprise roughly 12 percent of federal spending and pose much less risk to the fiscal outlook than defense spending, entitlement programs and interest on the growing debt."

The most significant aspect of Obama's budget, the Concord Coalition concludes, "is what's missing. There are no significant cost-saving proposals for the three largest entitlement programs: Social Security, Medicare and Medicaid. Nor is there a proposal for comprehensive tax reform. Addressing a $14 trillion debt and high projected deficits requires mandatory spending proposals that go far beyond simply trimming at the margins of various government agencies."

However, there's a reason why politicians - of both parties -- are more comfortable "trimming at the margins."

When asked whether it will be necessary to cut Medicare and Social Security "to significantly reduce the deficit," only 18 percent of respondents said yes when it comes to Medicare and just 22 percent agreed when it comes to Social Security, according to an NBC/Wall Street Journal poll out last week.

There was some encouraging news inside that poll. Greater numbers of Americans were prepared to take some specific steps to put Social Security and Medicare on a more sustainable path, such as reducing benefits for wealthier retirees and gradually raising the retirement age to 69 by 2075.

Americans understand that the country is headed off a fiscal cliff. Perhaps it's now up to their leaders from both parties in Washington to help people understand that the time may have come to look beyond "trimming at the margins."

Jonathan Riskind -- 791-6280


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