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Obama's Budget: What About Entitlements?

Ryan Faughnder |
February 14, 2011 | 10:46 a.m. PST

Senior News Editor

Perhaps unsurprisingly, President Barack Obama’s proposed budget, which he unveiled Monday, barely touches the fiscal crisis’s most significant political hot potato: Social Security.

(White House Creative Commons)
(White House Creative Commons)

Despite the urging of the administration’s deficit commission to make serious cuts to the federal pension program for seniors, Obama’s budget leaves the massive entitlement program alone. This is unsurprising given that the last attempt at reform, by George W. Bush, failed.

"Social Security is a solemn commitment to America's seniors that we must preserve," Obama said. "That is why I have laid out my principles for reform and look forward to working with the Congress."

This flies in the face of the November proposal by Erskine Bowles and Alan Simpson that recommended $4 trillion in total spending cuts, including deep cuts to Social Security and a gradual increase of the retirement age. Obama’s plan, in contrast, is supposed to reduce the federal deficit by $1.1 trillion over ten years, leaving the national debt of $14 trillion virtually unchanged.

Entitlement programs such as Social Security, Medicaid and Medicare compose 60 percent of government spending.

Simpson expressed his lack of surprise to The Wall Street Journal. “It doesn’t bother me a bit,” he said. “We’ve thrown a stink bomb in the rose garden. It ain’t going away.”

Deficit hawks and other commentators are weighing in with varying degrees of vitriol.

  • Financial Times columnist Terrence Keeley calls attention to what many see as the inadequacy of the administration’s budgetary actions: “Deck chairs are being rearranged on the Titanic. American politicians promise their constituents an ever-expanding social safety net, but with no intention of paying for it. Most experts know entitlement reform is essential, but few political leaders dare to lead – because doing so would be self-immolating.”
  • The Economist calls the situation “thoroughly depressing”: “Washington seems to have finally gotten itself in the mood to cut deficits. Unfortunately, the cuts that result are likely to be unhelpful, or possibly counterproductive, as leaders slash useful programmes to the bone because they're too scared to talk about reining in health care spending, or cutting wasteful defence programmes, or raising taxes.”
  • Forbes senior editor Shawn Tully lets loose, writing that, “by not choosing at all, the U.S. will by default make the worst possible choice.”
  • However, Vermont independent Senator Bernie Sanders, in an op-ed published in the L.A. Times, argued against either the privatization of Social Security or cuts to its benefits, writing that the program does not contribute to the deficit because it is paid for by payroll taxes.

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