More Empty Rhetoric on Public Investment and Discretionary Spending: Fred Hiatt Edition

Fred Hiatt trots out the standard centrist argument for cutting the already-stingy system of American social insurance (Social Security, Medicare, Medicaid): we need to cut this spending to preserve the “good” spending that he likes—non-defense discretionary (NDD in budget jargon) spending.

I agree with him that lots of NDD spending is good—it includes the general business of running the non-defense portions of the government as well as programs like Head Start, and it also includes a substantial chunk of public investment financed by the federal government. So yes, let’s preserve this.

But this claimed tension between spending on Social Security and Medicare versus NDD spending is plain false. We recently looked at various competing budget proposals to see what their implications were for NDD spending and public investment at the end of the budget window. Paul Ryan’s budget, which takes a chainsaw to the social insurance programs also saw the biggest squeeze on NDD spending and public investment. President Obama’s budget, which included damaging cuts to Social Security and was couched in the language of protecting public investment, still saw NDD and public investment spending reach historic lows by the end of the budget window. The Congressional Progressive Caucus Back to Work budget had no cuts to social insurance and yet had substantially higher NDD spending and public investment than all other plans. 

NDD spending

The reason why Hiatt and other centrist proponents of gutting social insurance continue to push this even in the face of evidence showing that these cuts will not translate into more of the good spending they approve of seems pretty clear in other parts of his op-ed: they simply think too much is spent on older Americans. Take this quote from this piece:

The guts of these programs [Social Security and Medicare] have to be preserved, as liberals rightly argue…  But while federal programs aimed at the young and the poor — and at investments in the future — are slated to dwindle, the entitlement programs are on track to give ever richer benefits to a growing older generation, some of whom don’t need all that much help.”

Well, sure, for some definitions of “some.” But this is clearly just the “greedy geezer” argument with some rough edges sanded off, and it’s nonsense. Social Security and Medicare do a good job of keeping the vast majority of seniors just out of poverty, but the idea that there’s huge savings to be made by only clawing back some benefits from the genuinely rich is false.

The economic content of Hiatt’s argument is just as bad. He writes that:

 “Social Security, for example, is designed not just to provide a floor for all seniors but to give each succeeding generation more generous benefits than the one before. That’s a nice idea but one the country can no longer afford, at least not without robbing the future”

Really? Why are we so sure that “the country” can’t afford Social Security’s scheduled benefits? Take a look at this chart – the black line shows the share of the country’s economy that is scheduled to be devoted to Social Security benefits in the very long run. Not sure what looks so obviously unaffordable about this.

soc sec

Look, our country is very rich and unless we let climate change ruin the future it will just get richer and richer going forward. “We” can afford our social insurance programs, so long as the “we” being tapped includes those at the very top who have seen the vast majority of income-gains in the past generation.