In the wake of the 1987 stock market crash, a wise and wily Wall Street executive told his troops \u201cchange only comes through pain and agony.\u201d\u00a0 By bringing a healthy dose of \u201cpain and agony\u201d to Washington, sequestration will introduce some sanity to the Federal budget.\u00a0 It may seem modest to workers who have already endured years of pain in the corporate sector, but sequestration does alter the budgetary calculus.<\/p>\n
Inside the beltway, consensus \u201cthinking\u201d has been:\u00a0 \u201cEveryone knows that the budget deficit is being driven by entitlements, not discretionary spending.\u00a0 But we can\u2019t cut entitlements because seniors vote, so we can\u2019t cut Federal spending.\u201d\u00a0 The equally illogical corollary was, \u201cWe don\u2019t need to set priorities; we\u2019ll just spend more on everything next year.\u201d<\/p>\n
That all changed with sequestration.\u00a0 Suddenly, the special interests that feed at the Federal trough\u2014potent Democratic interest groups such as universities, government workers, scientists, and community organizers — are facing real cuts, relative to what they expected to spend.\u00a0 They\u2019re asking their rich Uncle Sam, \u201cWhy are you cutting my budget while leaving Medicare, Medicaid, and Social Security untouched?\u00a0 My work is so much more important to the country than ever-expanding entitlement programs riddled with waste.\u201d\u00a0 The next step is obvious \u2013 entitlement reform.<\/p>\n
Exhibit A is an open letter by Princeton University President Shirley Tilghman on \u201cThe Cold Wind of Sequestration,\u201d which was published in the alumni magazine.\u00a0 You can almost feel the pain as she denounces sequestration as:<\/p>\n
\u2026a bludgeon, subjecting both civilian and defense programs to indiscriminate reductions of roughly one trillion dollars over the next 10 years.\u00a0 Not only does this approach unfairly target areas of spending that constitute only a third or so of the federal budget<\/b>, it also fails to differentiate between programs we can reasonably curtail or eliminate<\/b> and those that are essential to our nation\u2019s future.\u00a0 Among the latter are investments in higher education and fundamental research.\u00a0 [emphasis mine]<\/p>\n
\u201cCurtail or eliminate\u201d programs?\u00a0 \u201cUnfair\u201d to leave entitlements unscathed?\u00a0 She sounds more like Paul Ryan than Barack Obama (for whom just about every Princeton employee voted). A couple of things will intensify the pain.\u00a0 This spring Republicans in the House will hold out for yet more cuts in return for raising the debt ceiling\u2014one dollar of cuts for every dollar increase in the ceiling.\u00a0 And yet another entitlement \u2013 Obamacare \u2013 starts to squeeze discretionary spending next year.\u00a0 A military incursion in Syria or Iran could also be costly.<\/p>\n
Look for universities and other interest groups on the left to discern the wisdom of setting priorities and putting a brake on the mindless, remorseless, unmanaged, automatic expansion of Medicare and Medicaid.\u00a0 Everyone, including most Democrats, knows that their costs are inflated by fraud, unnecessary medical tests, lack of means testing, absence of price incentives, etc.\u00a0 While I don\u2019t deny that medical inflation is hard to control, there is plenty of low hanging fruit to be plucked once Democrats realize that Federal dollars are a scarce resource.\u00a0 There\u2019s also a straightforward Keynesian argument: unlike cuts in current discretionary spending, entitlement reform reduces the deficit gradually without cutting government spending in today\u2019s weak economy.<\/p>\n
Copyright Thomas Doerflinger 2013.\u00a0 All Rights Reserved.<\/p>\n","protected":false},"excerpt":{"rendered":"
In the wake of the 1987 stock market crash, a wise and wily Wall Street executive told his troops \u201cchange only comes through pain and agony.\u201d\u00a0 By bringing a healthy dose of \u201cpain and agony\u201d to Washington, sequestration will introduce … Continue reading