A Bipartisan Move to Tackle Benefits Programs

From The New York Times:

In a significant shift driven by bipartisan concern about the looming long-term debt, Republicans and Democrats are no longer fighting over whether to tackle the popular entitlement programs — Medicare, Medicaid and Social Security — but over how to do it.

Many Congressional Republicans remain haunted by the experience of former President George W. Bush’s futile effort in 2005 to partly privatize Social Security, which contributed to the party’s loss of its House and Senate majorities the next year and convinced Congressional Democrats of the power of the issue.

More than half of Americans, 56 percent, would be less likely to vote for a presidential candidate who favored phasing out Social Security so that workers could invest their payroll taxes in the stock market, according to a nationwide poll in June by The Wall Street Journal and NBC News. That included 64 percent of Democrats and 57 percent of independents, whose swing votes decide elections, and even a 45 percent plurality of Republicans. Only one-third of Republicans said they would be more likely to vote for someone who espoused ending Social Security.

Until Mr. Perry’s recent entry into the Republican contest, the debate over reining in the projected growth of the entitlement programs focused on the health programs, Medicare and Medicaid. Their projected costs, given the aging of the population and fast-rising medical expenses, are greater and growing faster than those for Social Security.

While House Republicans boasted in April of the boldness of their budget — it would turn Medicare into a voucher program for private insurance and Medicaid into a reduced block grant to states — they steered clear of changing Social Security.

Now they have a potential presidential standard-bearer who is taking on Social Security — the so-called third rail of American politics — with both hands.

The collapse of the budget negotiations between Mr. Obama and Mr. Boehner, with their tentative trade-off between savings from entitlement programs and new revenues, left many in both parties convinced that no significant debt-reduction bargain is likely before the 2012 elections. Unless Republicans accept higher taxes on the wealthy, and they swear they will not, Democrats will not support reductions in future entitlement benefits.

Yet both parties are feeling the pressure to act sooner. That reflects not only the seriousness of the nation’s looming debt crisis as baby boomers age, but also the possibility later this year that just as in this summer’s fight over raising the debt limit, the financial markets and the economy in general will be shaken by dysfunction in Washington if no plan can be mapped out by the new deficit-reduction committee and enacted by Congress.