Donald Trump’s deal with the Democrats to raise the debt ceiling for three months and fund $15 billion in disaster relief has delighted the Dems and infuriated Republicans. “Trump got rolled!” was the refrain, said in disgust by one side and exultation by the other, since the Dems gave up nothing for the deal. The president seemed to rub salt in the Republicans’ wounds when he called the Senate minority leader and House minority leader “Chuck and Nancy.” The old NeverTrump claim that Trump is neither a true Conservative nor a Republican appeared prescient.
Leaving all that aside, the move probably will satisfy a majority of voters. The vote in the House before the meeting was 316-90, suggesting that the most democratic branch of government, and hence most accountable to the people, had an idea that such a move is what the people want. Later, the presumably more sober and judicious Senate agreed with an 80-17 vote. The old lesson of democracy is still valid: politicians succeed by giving people what they want. Ignoring vox populi is a surefire way to get tossed from office.
Raising the debt ceiling is an especially revealing moment in our democratic politics. The problem is critical: Common sense and simple mathematics tell us our runaway debt, deficits, and entitlement spending will in a few decades hit our economy like a Cat 5 hurricane. But the electorate’s fondness for these programs makes them nearly untouchable.
Nearly two-thirds of the annual budget goes to “mandatory” spending on Social Security, Medicare, Medicaid, and interest on $20 trillion of debt, along with some of the 83 social welfare programs. This spending will continue to grow as the population ages and interest costs return to normal levels. Social Security illustrates the problem. Its unfunded liability for the next 75 years is $12.5 trillion, an increase of 166% from just ten years ago. Social Security is losing money every year, $54 billion in 2016. In ten years that deficit will reach $215 billion in real dollars. Today, the “trust fund” financing the program is made up of Treasury debt, which means the feds have to borrow more money or raise taxes when the bonds are cashed in to pay recipients. It’s sort of like using one credit card to make a payment on another.
If left unreformed, programs like Social Security and Medicaid will hit the demographic wall: right behind the 75 million Boomers are nearly 76 million Millennials. Increasing longevity means that benefits for more people will be paid out for more years. We can’t grow ourselves or tax ourselves out of this looming disaster. Programs have to be reformed (higher employee contributions and retirement ages, and means-testing benefits), and more importantly, cut.
This problem is well known, amply documented, often decried, and seldom addressed meaningfully. Deficit and debt hawks blame politicians for pandering to the people, especially Democrats who think the “rich” don’t “pay their fair share,” and have secret vaults of money they’ve unjustly finagled from the people, even though the collective wealth of the country’s some 540 billionaires couldn’t fund the federal government for one year. Weak-kneed Republicans go along, afraid of their constituents and the progressive media that will Scrooge them royally every time a modest reform––such as cutting just the rate of increased spending for a program––is put on the table.