The (Smart) Politics of Punting on Entitlements

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Everyone seems to be outraged that President Obama has broken his promise to tackle entitlement reform and turned in a 2012 budget that ignores two main factors in ruinous fiscal outlays, Social Security and Medicare. Obama’s budget proposes cuts in discretionary spending, but in his State of the Union address in January he declared, “We have to stop pretending that cutting this kind of spending alone will be enough.” The only way to tackle our deficit, Obama said in the speech, is to target health care spending and social security.

Beyond the quaint idea that politicians should do what they promise, there are policy reasons the White House should worry about entitlements. The cost to maintain mandatory spending programs is growing, not least because Obama and the Republicans agreed to cut paycheck contributions to Social Security last December, and health care inflation is steadily on the rise. Politically there would appear to be dangers too, as the mid-term elections seemed to be about fiscal responsibility: 39% of voters in exit polls said reducing the budget deficit should be the highest priority for the next Congress.

In reality, though, for Obama the politics break cleanly towards punting on entitlement reform. The most recent Pew poll on public attitudes towards the budget deficit show broad agreement that it is a major problem but little support for measures that would address it. 70% of those polled in early December by Pew said the federal budget deficit was a major problem that needed to be addressed, but only two measures—raising the Social Security contribution cap and freezing federal salaries—received majority support. Reducing Social Security for high-income seniors squeaked plurality support 48%-47%. All other measures, including creating a national sales tax, raising the Social Security retirement age, raising Medicare contributions or taxing employer-provided health insurance, ranged from 52% to 72% disapproval.

The politics don’t get any stronger in support of action on entitlements by Obama when you break the issues down on party lines. Democrats oppose benefit and spending cuts much more aggressively than Republicans, of course. But on some proposals targeting entitlement spending, like reducing Social Security for high-income seniors, independents disapprove more strongly than either party. Even if Obama is willing to compromise and move forward with reform, as he said in his press conference Tuesday, he has political room to let Republicans go first if they want to take a whack: when it comes to dealing with the deficit those polled by Pew had confidence in Obama 53%-44%, vs. Republican Congressional leaders 40%-56%.

And whatever the lessons of the midterms, budgets are less of a voting issue in presidential elections. The last time budgets made a difference in a presidential race was in 1992 when Ross Perot stole votes from George H. W. Bush, helping Clinton to win. No one’s going to steal votes from Obama in 2012 by running as an independent and calling for balanced budgets.

That doesn’t mean Obama’s decision to punt is good for the country: Getting deficits down is important both for the long-term viability of entitlement programs and for reassurance that the U.S. economy is solid and the government can pay its debts. But should Obama spend any political capital leading the charge to cut popular programs? It’s hard to see why he would.