Wednesday, October 02, 2013

The Beginning of the Beginning

Holman Jenkins speculates that the current crisis over the government shutdown is just the beginning of a long overdue debate on the real long term fiscal issues we need to address. Behind the Noise, Entitlement Reform:

It would be nice if today's fight were genuinely about the future, about long-term spending. Oh wait, that's exactly what the ObamaCare fight is about. By trying to stop a brand new entitlement before it gets started, in a country already palpably and indisputably committed to more entitlement spending than it wants to pay for, those radical House Republicans aren't trying to chop current spending amid a sluggish recovery (however much one begins to doubt that pump-priming from Washington is the solution the economy needs).

Those terrible House Republicans aren't trying to force colleagues to commit painful votes to take away established goodies from established voting blocs—votes that neither Republicans nor Democrats have the slightest yearning to cast.

Those disgraceful House Republicans have made the fight exactly about the long term. Where's the grudging approval from our Keynesian friends who constantly say immediate spending must be protected and reform saved for the long term?

Sadly, although the Internet has spawned 100,000 pundits, most of what you find there today is two different echo-chamber versions of blame-laying for Tuesday's theatrical government shutdown. A favorite Democratic talking point starts from the claim that the 2012 election settled everything; the Obama vision of an expanded entitlement state won. But, rightly, nothing is ever settled in a democracy, and Mr. Obama certainly settled nothing because he never said how he wanted to pay for the spending he treated as untouchable.

In fact, his public attitude that all spending was sacrosanct was somewhat belied by his off-the-record (he thought) claim to the Des Moines Register editorial board in the race's closing hours that his first order of business would be a grand bargain with Republicans on taxes and spending.

This was more Obama smoke, since we're nowhere near a consensus on what such a bargain should consist of and we may need 10 more episodes of tea party "madness" to get there.

Not only will there be more such showdowns. What passes for progress each time will be tiny—until it's not. The 2011 sequester, which caused critics to engage in choruses of disapproval and the S&P to downgrade U.S. debt, set us on a path to today's modestly smaller current deficits. This week's peculiar fight may be resolved by a near-meaningless repeal of ObamaCare's self-defeating medical device tax—a teensy if desirable adjustment, having no bearing on the deficit tsunami that begins when the baby boomers start demanding their benefits.

We are at the beginning of the beginning. Yet the birth pangs of entitlement reform that will one day inspire the world (as we did with tax reform in the '80s) may be what we're witnessing.

We can only hope that’s true. The “pain” we’re supposedly dealing with today will be nothing compared to what we’ll be forced to go through at some point in the not too distant future. The sooner, the better.