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It's Time for Democrats to Accept Spending Cuts

Posted at noon on Nov. 28, 2012

A growing number of Republican lawmakers are expressing an openness to increasing tax rates as part of a “fiscal cliff” deal. Now it is Democrats’ turn to put spending cuts on the table, according to Sebastian Mallaby.

“Precisely because the election has buoyed Democrats, most seem unwilling to restrain health and pension costs. Given that these will swamp tax policy in the long run, this is a ruinous error…  the trouble with higher taxes is that they are not enough to plug the deficit… Federal health and pension promises cost 10.4 per cent of GDP today; the CBO projects that they will cost 16.6 per cent in 2037. No plausible tax rise can offset that leap. If Mr Obama cares about his legacy, he must acknowledge this arithmetic.”

6comments
Budget & Taxes, Economy

Headlines

  • http://profiles.google.com/creed.pogue Creed Pogue

    There isn’t going to be a “grand bargain.” Why wouldn’t we wait a few years before chopping up Medicare until we see how things work out with Obamacare???

  • molosky

    Great commentary on Bizarro World politics.

    Here on Earth, though, Democrats have ALWAYS accepted spending cuts. Obama has proposed a very minor tax increase — obviously not one designed to offset the entire deficit.

    This hasn’t been an issue at all, in fact. Norquist purism on taxes is what is holding us back.

    • Wynstone

      I don’t hear any Democrats objecting to cuts in defense or corporate subsidies. Why is there such an insistence on the cuts damaging those who struggle the most? Are hungry children going to balance the budget?

  • BigGuyDon

    Eventually they’ll have to cap costs on medical spending, but not until they’ve seen how much they can squeeze out of the insurance companies. Let this change take affect and than access potential improvement.

    There is no reason with technological advances and increased preventative care that medical costs should be allowed to continue to expand at the rate they have over the last decade. Every other sector where competition is present sees a lowering of costs as technology and efficiency increases. Reform health insurance and malpractice insurance, then talk to me about cutting spending.

  • ultragreen

    Some increases in health care costs are unavoidable as the population continues to age, but the people who are living longer these days (in the United States) are the wealthy, not the working class or poor. In addition to the growing income gap in the United States, there is also a growing longevity gap between the social classes. Medicare and Medicaid costs are easily controlled by: 1) making the wealthy pay more for their increased use of medical services at government expense, and 2) by restricting reimbursements rates for medical services to the rate of inflation or less.

    As for the private health insurance industry, it has been an abysmal failure in containing health care costs. They simply pass along increased costs to consumers and businesses in the form of higher insurance rate increases that have greatly exceeded the rate of inflation.

  • http://profile.yahoo.com/V5XAJ3PNU4PVBCHXHF4TMYM4DI Kentebe D

    Are you not the off-springs of those who called the Great Deals Communism? You are simply heartless and will not be satisfied until the poor start dying on the streets en-masse from hunger and disease.

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