Last week I had an interesting experience. I was asked to testify before a hearing of the Senate Democratic Policy Committee. I made it clear to them that I was a Republican, but they said they wanted me anyway. I suppose that they knew that I have become very disturbed by the Republican Party’s fiscal policy and they presumed that I would attack it. I did not disappoint them.
I explained that I am not particularly a deficit hawk, nor do the size of the Bush tax cuts bother me. What really bothers me is the orgy of spending by Republicans. It is just appalling that the recent highway bill had 5,000 “earmarks” in it. These are almost without exception, utterly unjustified pork barrel projects.
I am further appalled by President’s Bush’s unwillingness to use his veto pen to maintain some semblance of fiscal discipline. He is the first president to serve a full term without vetoing anything since John Quincy Adams, who served from 1824 to 1828.
Adams perhaps had the excuse that his father, President John Adams (1796-1800), didn’t veto anything, either. But President Bush cannot use that excuse. His father vetoed 29 bills in his four years in office (1988-1992).
When I complain about this to the rapidly dwindling number of friends I have in the White House, they always tell me that it is very hard to veto bills when a Congress controlled by your own party passes them. But this excuse is just total humbug, as the Brits might say. Franklin D. Roosevelt vetoed a record 372 bills, every one of them passed by Congresses controlled by his party. Other Democrats have also shown no unwillingness to veto bills passed by Democratic Congresses. John F. Kennedy vetoed 12 bills, Lyndon Johnson vetoed 16, and Jimmy Carter vetoed 13.
But pork barrel projects—even tens of billions of dollars worth of them—are not what has dug us into a fiscal hole. It is the rapidly escalating cost of entitlement programs. President Bush is well aware of the problems in this area. He eloquently explained the deteriorating fiscal condition of the Social Security program in many speeches this year, as part of his effort to reform that program and stabilize its finances for future generations.
He was unsuccessful in large part, I believe, because he made the finances of the Medicare program—which was in far worse shape than Social Security to begin with—vastly worse by adding a huge, unfunded drug benefit. The Medicare program was already bankrupt and should have been the primary focus of Bush’s reform effort. Instead, he not only ignored Medicare’s looming crisis, he made it an order of magnitude worse.
By contrast, Social Security is in great financial shape and nowhere near the imminent collapse that faces Medicare in just a few short years. Here are the facts as reported by the Social Security and Medicare actuaries earlier this year. The unfunded liability of Social Security in perpetuity is $11.1 trillion. The unfunded liability of Medicare is $68.1 trillion, of which $18.2 trillion is accounted for just by the recently enacted drug benefit.
In short, even if President Bush had been successful in enacting a perfect Social Security reform bill, one that completely eliminated that program’s unfunded liability, we would still be $7 trillion worse off as a result of the extraordinarily ill-considered drug benefit. To put it another way, we could repeal the drug benefit, finance Social Security forever with no benefit cuts or tax increases, and still cut $7 trillion off our national indebtedness.
Why the Democrats don’t pick up on this idea is a mystery to me. Almost none of them supported the drug bill—on Friday, Senate Minority Leader Harry Reid (D-NV) reminded me that he had voted against it—so they have nothing to lose. The program hasn’t really even taken effect yet, so no one would lose anything they now have. Seniors would lose only a future benefit that few seem to be keen on anyway.
Senator John McCain, Republican of Arizona, told CBS News last week that the growing costs of the Iraq war and the new burdens created by hurricanes Katrina and Rita mean that the drug bill must be reopened for discussion. “We’ve got to cancel it, go back to square one,” he said. “It was a bad idea to start with.”
Unfortunately, President Bush’s reaction to any suggestion that the drug bill even be postponed has been outrage and the promise of a veto. “I signed the Medicare reform proudly,” he said earlier this year, “and any attempt to…take away…prescription drug coverage under Medicare will meet my veto.”
It would be ironic if the only bill of his presidency he absolutely should not veto became the only one he did veto.