Over next several years, the parties will differ violently over what to do about entitlement problem while doing very little to actually address it.
By David Brooks
The New York Times
March 19, 2005
If you want an image that captures what American politics will be like over the next few decades, imagine two waves crashing down upon us simultaneously, each magnifying the damage caused by the other.
The first wave is the exploding cost of the entitlement programs. The second wave is the ever-increasing polarization of the political class. The polarization will make it impossible to reach an agreement on how to fix the entitlements problem. Meanwhile the vicious choices forced on us by entitlement costs will make the polarization even worse.
The realities of the first wave - the looming fiscal crisis - are pretty well known. According to the Congressional Budget Office, Social Security, Medicare and Medicaid will consume 14 percent of national output in 2030 and 21 percent in 2075 - up from about 8 percent today. Partly as a result, the federal government will have to come up with an extra $50 trillion just to pay for the promises it's made as of today.
To cover these costs, federal officials will have several options, all of them horrible. If they acted immediately, according to the economists Kent Smetters and Jagadeesh Gokhale, they could increase federal income taxes by 78 percent; they could double payroll taxes; they could cut Social Security and Medicare in half; or they could do some combination.
Tax increases on that scale would decimate the economy. Benefit cuts would cause pain. Doing nothing would lead to enormous deficits, an immobilized government and stratospheric interest rates. It would mean the end of the United States as a great economic power.
The realities of the second destructive wave - polarization - are also widely recognized. They can be measured by the increase in party-line voting in Congress, the bitter political atmosphere in Washington, the political segmentation of media outlets and the emergence of rigid donor and activist bases in each party that use their power to inflict Stalinist party-line orthodoxy on potentially independent leaders.
We're seeing polarization in action in the Social Security debate. It's a straightforward problem compared with Medicare, but Congress is deadlocked. We see polarization in action in the looming fight over judges, which is producing talk about nuclear options and threats to shut down the Senate. A political class that can't make a deal on a few judges is not going to be able to cooperate when it comes to filling a $50 trillion hole.
Over the next several years, the parties will differ violently over what to do about the entitlement problem while doing very little to actually address it. This past Thursday the Senate even rejected a proposal that would have made a sliver of a trim in the growth of Medicaid.
But over time, the entitlements crisis will begin to transform politics. The parties will grow less cohesive. The Democrats are held together by the common goal of passing domestic programs that address national needs - like covering the uninsured. But with all the money going to cover entitlements, there will be no way to afford new proposals. Republicans, meanwhile, owe their recent victories to the popularity of tax cuts. But those will be impossible, too. Both parties will lose a core reason for being.
At the same time, Americans will grow even more disenchanted with the political status quo. Not only will there be a general distaste for the hyperpartisan style, but people will also begin to see how partisan brawling threatens the nation's prosperity. They'll read more books like "The Coming Generational Storm" by Laurence Kotlikoff and Scott Burns and "Running on Empty" by Peter Peterson. They will be more aware of the looming disaster. As the situation gets worse, the prospects of change get better, because Americans will not slide noiselessly into oblivion.
The party alignments have been pretty stable over the past few generations, but there's no reason to think they will be in the future. The Whig Party died. The Progressive movement arose because the parties seemed stagnant a century ago. I wouldn't be surprised if some anti-politician emerged - of the Schwarzenegger or Perot varieties - to crash through the current alignments and bust heads.
I wouldn't be surprised if many of today's politicians decided to reorient their careers. I meet too many who are quietly alarmed by the looming fiscal catastrophe and who know that if their party doesn't tackle this problem, it simply won't be relevant to the issue that will dominate politics for years to come.