Beltway Magic Show Won't Let Reality Intrude into Fiscal Cliff Talks
Two years ago, President Barack Obama spoke at a Republican retreat. In his speech, he lauded the bipartisan deal-making that occurred between President Ronald Reagan and then House Speaker Tip O'Neil that restored the solvency of Social Security for another generation. Obama said:
The major driver of our long-term liabilities, everybody here knows, is Medicare and Medicaid and our health care spending. Nothing comes close.
Social Security we could probably fix the same way Tip O’Neill and Ronald Reagan sat down together and they could figure something out. That is manageable.
Medicare and Medicaid, massive problem down the road. That’s where — that’s — that’s going to be what our children have to worry about.
Well, Medicare and Medicaid aren't just something our children have to worry about. Both plus the massive expansion of the welfare state during Obama's term have become problems we have to worry about now. But Obama has chosen not to sit across the table from House Speaker John Boehner and hammer out a deal. He has chosen to go out campaigning instead.
Administration officials said Obama will hit the road this week for a campaign-style series of events with ordinary Americans, including a visit to a toy manufacturer in suburban Philadelphia on Friday. That trip and others will be aimed at increasing pressure on Congress to reach an agreement on heading off a series of automatic spending cuts and tax increases that are scheduled to begin in January.
This tactic comes as a surprise only to those who haven't been paying attention, which describes about 50.6% of the country now. Barack Obama has zero experience in negotiating with people who don't agree with him, and zero experience managing anything successfully other than a pair of campaigns. But we're stuck with him for another four years.
Meanwhile in Washington, eyes focus on Grover Norquist because the Democrats and their media PR operatives have made him a target. Targeting him is fine, but it should never be confused for leadership. Some Democrats have made small nods in the direction of "entitlement reform" but none of them are really addressing one of the greatest drivers of our national debt: Welfare. They're talking Medicare and Medicaid, but not the tilting of the scales toward dependency and away from work that has happened with alarming speed since Barack Obama's first inauguration. A new report from Pennsylvania -- which supported Obama's re-election this month -- spells out the shift in detail.
[F]or increasingly more it is now more lucrative - in the form of actual disposable income - to sit, do nothing, and collect various welfare entitlements, than to work. This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."
When you can make more money sitting around than you can by working, who wants to work?
More important, who in Washington wants to bring this up? Who wants to bring up the fact that federal welfare spending increased 32% from 2008 to 2011? Who wants to bring up the fact that we're now spending over $1 trillion per year on all the myriad federal welfare programs? Who wants to bring up the fact that part of the increase is surely due to the fact that Obama's government advertised food stamps to middle class Americans who have jobs and own their homes and cars, but who nonetheless have gone on the dole because they can?
The Democrats know that the increased welfare spending positioned them as the guarantors of government largesse to enough people to swing an election in troubled economic times their way, so they won't bring it up. Cuts now all but guarantee that they will lose seats in 2014. Republicans are still shell-shocked from Nov. 6 and in no mood to push an issue that Obama and his media PR flaks will spin as racist.
So the unreal Beltway false fiscal cliff negotiations will go on. We're all watching a bunch of hack magicians pull lame sleight of hand tricks while the theater burns down around us.