Fiscal Responsibility Begins Abroad

Digby is sounding the alarm about the "fiscal responsibility summit" that President Obama will convene in February.

I know it's probably right that we give him a chance before we completely go postal about this, but I also know that if this were a Republican saying these things I'd certainly be doing everything in my power to oppose it. But then that's the beauty of the Nixon goes to China gambit, isn't it? It neatly shuts down the most fervent opposition. That's why it's so frightening. He might just get it done.

According to the Pentagon Post (natch!), Social Security and Medicare are in the line of fire:

President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."...

[H]e framed the economic recovery efforts more broadly, saying it is impossible to separate the country's financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.

"This, by the way, is where there are going to be very difficult choices and issues of sacrifice and responsibility and duty," he said. "You have to have a president who is willing to spend some political capital on this. And I intend to spend some."

 

Spend "political capital" on cutting Social Security? Just this Monday, George Bush admitted his second-term assault on Social Security was one of his biggest mistakes. And it's insane to target Social Security at a time when 401k's and IRA's are getting killed in the stock market.

As for Medicare, we need to expand it to "Medicare For All," not cut it back so seniors get dumped out of hospitals. The biggest waste in our health care system is the overhead and profits of insurance companies. If there's a need for sacrifice, let's sacrifice them.

Happily, when it came to the details, Obama refused to cave in to the PentaPost's demands:

Obama was careful not to outline specific fixes for Social Security and Medicare, refusing to endorse either a new blue-ribbon commission or the concept of submitting an overhaul plan to Congress that would be subject only to an up-or-down vote, similar to the one used to reach agreement on the closure of military bases.

But the president-elect exuded confidence that his economic team will succeed where others have not.

"Social Security, we can solve," he said, waving his left hand. "The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system."

Exactly right. Social Security can be tweaked while Medicare requires a transformation of our entire health care system. Obama opposes Single Payer, so we will have to build a massive movement to change his mind.

In the meantime, if Obama really wants to "send a signal that we are serious" about cutting the deficit, the first place to cut is by shrinking the massive and unaffordable American Empire: 

1. close Gitmo immediately, not in 4 years 
2. save $10 billion per month by bringing all of our troops home from Iraq as fast as possible
3. save another $2 billion per month with a new, non-military strategy to GetAfghanistanRight
4. save countless billions by cancelling massively expensive weapon systems like the F22 that even neocon John McCain was willing to cut
5. close many of the 800 bases in 60 countries

Update 1: On Meet the Press (1/18/09), Rahm Emanuel highlighted Pentagon cost overruns, corporate welfare, and health care costs:

Challenges that needed to be met, responsibilities that needed to be met have not.  So from the era--from the area of, let's just say, in the defense area.. On an annual basis we have about $300 billion in cost overruns. That must be addressed, and we will be addressing it.  Area of subsidies to corporate America, that must be addressed.  And then also, dealing with the bigger obligations of health care costs and their--and what they have done to the federal budget.

Chris Bowers was pleased by Emanuel's points:

What is particularly revealing, and exciting, about this passage is that Emanuel not only clearly implies cuts in defense spending are coming, but he places an actual number on it:  "about $300 billion." Further, this figure does not even seem to include money that will be saved by withdrawing troops from Iraq, as Emanuel's language is focused on "cost overruns." Withdrawing from Iraq, and cutting $300 billion in other defense spending, would wipe out the increases in military spending under the Bush administration. It would even reduce military spending to a smaller percentage of the federal budget than it was during the Clinton administration.

Making the public spending aspects of the stimulus plan permanent, cutting defense spending and ending the Bush tax cuts would collectively serve as a an even more progressive re-arrangement of federal spending than President Clinton's 1993 budget. Expand the public expenditure parts of the stimulus, and start running TARP better (more foreclosure mitigation, higher ownership stake in the companies receiving the money, higher rate of return on the preferred stock), and we might be getting close to what Paul Krugman has called a post-bubble re-organization of the economy.