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Politics of age skew spending debates

January 03, 2013|David Lauter
  • President Obama makes a statement after the "fiscal cliff" deal.
President Obama makes a statement after the "fiscal cliff"… (Chris Kleponis / Associated…)

WASHINGTON — Congress has become the butt of late-night comedians for waiting until the last minute to do any work, yet its procrastination involves something more than fecklessness: The issue over which it keeps stumbling not only separates its two parties into warring camps, but divides them internally.

At its core, the debate over the size of government and how to pay for it pits the interests of the huge baby boom generation, now mostly in their 50s and 60s, against the needs of the even larger cohort in their teens and 20s. With limited government money to spend, how much should go to paying medical bills for retirees versus subsidizing college loans, job training and healthcare for young families with children?

As they grapple with that, the party of small government increasingly relies on the votes of people dependent on entitlement spending. And the party that created the massive government programs for retirees has more and more become the political home of the young.

The part of the debate that ended Tuesday night mostly involved how limited the government's resources would be. Congress agreed to add about $620 billion to federal revenue over the next decade. But the vote locked in place the Bush-era tax cuts for everyone with incomes below $400,000 a year, a decision that denied the Treasury about $4 trillion over the same period.

For The Record
Los Angeles Times Friday, January 04, 2013 Home Edition Main News Part A Page 4 Local Desk 1 inches; 53 words Type of Material: Correction
Federal spending: An article in the Jan. 3 Section A about Congress and the politics of age said that over the last 40 years, total federal spending has averaged about 18.5% of the U.S. gross domestic product. Federal revenues averaged 18.5% of GDP over the last 40 years. Spending averaged 21% of GDP.

That vote did not end the tax debate, but it did settle the biggest part of it. White House officials say that this spring, when the next budget deadline arrives, President Obama will seek several hundred billion dollars more over the next 10 years. But even if he prevails over Republican opposition, the increment would be relatively small.

Increasingly, therefore, the coming fights over the budget will focus on the topic that both sides have shied away from: spending on retirees.

Both parties prefer to focus voters' attention elsewhere. Democrats like to blame the rise in the national debt on the George W. Bush-era tax cuts -- 98% of which Congress just voted to renew -- and the cost of the wars in Iraq and Afghanistan. Republicans like to point to Obama's economic stimulus efforts.

Each of those policies has contributed to the debt, but only to a limited degree. The real driver behind the government's long-term debt problem comes from the huge number of people entering retirement.

Over the last 40 years, the federal government has spent, on average, about 18.5% of the U.S gross domestic product -- the overall output of the economy. At the current rate of increase, Social Security and Medicare alone would equal 16% of the economy by the time the number of retirees stops growing, about 25 years from now, the Congressional Budget Office projects. Most of the increase would come from the cost of healthcare.

Obama acknowledged that problem when he spoke Tuesday night.

"The aging population and the rising cost of healthcare makes Medicare the biggest contributor to our deficit," he said. "I believe we've got to find ways to reform that program without hurting seniors who count on it to survive."

That's a more straightforward acknowledgment of the problem than political figures typically offer. Liberal Democrats typically prefer to talk about taxes, not spending. Republican congressional leaders tend to do what House Speaker John A. Boehner (R-Ohio) did in his statement Tuesday night: avoid naming any specific programs and instead use euphemisms. He said he would push for "significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."

The coy comments from both sides underscored the conflicts between their positions and their most potent supporters.

Democrats have long championed the government's social safety net. Medicare, passed under Lyndon B. Johnson, and Social Security, under Franklin D. Roosevelt, stand as two of the party's proudest policy achievements.

Yet Democrats' strongest support now comes from younger voters. Obama in particular has focused on the needs of that constituency, and he has shown more willingness than many in his party to consider trimming the cost of retirement programs. On Tuesday night, as he talked about the cost of Medicare, he repeated his call for government to spend more on "rebuilding our roads and bridges and providing investments in areas like education and job training" -- the spending preferences of the young.

In December, during his negotiations with Boehner, Obama offered a shift in how the government calculates cost-of-living adjustments. That technical-sounding move would reduce the deficit by about $220 billion over a decade, in large part by slowing the growth of Social Security payments.

Even though the White House proposed ways to shield the poorest and oldest from the cut, the idea drew howls of protest from some liberal Democrats, a foretaste of the internal divisions likely to surface this spring.

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