The American Interest
Analysis by Walter Russell Mead & Staff
The War on the Young Meets the Fiscal Cliff

A dull roller coaster ride is hard to imagine, but the world has two right now: they combine real importance with utter dullness. The scariest and the most boring is the endlessly running European agony over the future of the euro; the second big and boring ride is here in the United States over our fiscal cliff. Both crises involve issues of real importance and drama and in both cases there are legitimate fears that bad decisions by politicians could wreck the world economy. Yet despite the high stakes and the clear prospect of a terrifying fall, both rides have gone on so endlessly that increasingly even (maybe especially) educated newsreaders are terminally bored with both.

Still, on the US side, there are some important issues at stake. Obama’s blue boosters in the media were up in arms earlier this week when the president put Medicare and Social Security on the table in his negotiations with House Speaker John Boehner. Predictably, many on the left are now are worried that Obama is rolling over and preparing to give away the entitlements store to the GOP. But a very smart piece by Jonathan Chait in the New York magazine points out that the cuts to Medicare aren’t the real problem; cuts to discretionary spending are.

As Chait points out, that the budget discussion offers policymakers a simple choice: cut programs or raise taxes. Since Republicans are not willing to back down on cost-cutting and Democrats are not willing to sacrifice their beautiful blue entitlement programs, all that’s left is discretionary spending, which essentially comprises all spending that does not fit neatly into any other category. Unfortunately, discretionary spending covers an extremely wide area—including infrastructure and security. Much of that terrain is just as important as “untouchable” entitlement programs, if not more so. As Chait explains:

In Washington, these programs fall into the category of “discretionary spending,” which means they’re doled out every year by Congress. These categories are the whole guts of the federal government — infrastructure, regulation, security, and on and on. Because they fall into a broad catchall category, and because government spending in the abstract lacks a political constituency, it’s very easy for Congress to just ratchet the whole category down. And that’s exactly what has happened. Last year’s budget deal set domestic discretionary spending to drop to historically low levels. The Bowles-Simpson plan would have done the same thing. Obama’s latest offer ratchets that level down even farther.

We see this as yet another sign of the Baby Boom’s unrelenting war on the young. Geezers are so tightly organized to defend their pet programs that they are willing to sacrifice everything and everyone else to ensure that not a penny is cut from Medicare or Social Security. Discretionary programs are the things the actually keep the country running, yet they will be the first things to be cut when the government scales back.

It’s the national version of the fight we see being waged in many states and cities where public sector unions demand either sky high tax increases or savage cuts in services — anything so that unrealistic pensions be paid to a generation which collectively failed to create the wealth or invest the assets which could cover those liabilities at a reasonable social cost. It is the Boomer determination to ensure that future generations pay the price of its planning and social policy mistakes — and it is both shameful and wrong.

Rich boomers don’t want to be taxed to pay their share of the collective generational failure; less wealthy ones don’t want to lose a penny of the benefits they claim to have earned. It’s reasonable for some kind of political compromise to distribute the pain between different wings of this generation, but the generation as a whole needs to pay its fair share of the bill.

Published on December 21, 2012 9:10 am