One of the more amusing lines in President Bush’s State of the Union Address last month was his call for yet another commission to study the problem of entitlement spending. Entitlements are programs that do not require annual appropriations. The money is paid out automatically to anyone who meets the eligibility criteria. Spending cannot be capped because people have a legal right to their benefits. Hence, spending for entitlements can only be reduced by changing the basic law applying to Social Security, Medicare and Medicaid.
There are two reasons why the Bush proposal cannot be taken seriously. First, he has shown contempt for the whole idea of federal commissions. He appointed a Social Security commission early in his presidency, which produced a solid, credible report. But its work was utterly ignored when Bush started his failed Social Security reform effort last year. A key reason for that failure, I believe, is that the effort was all speeches and sound bites, with no substance—not even a formal proposal that could be studied and analyzed.
More recently, Bush appointed a tax reform commission. It spent most of 2005 holding hearings and issued a report with options for fundamentally restructuring the income tax. Members of the commission assumed that he would announce a tax reform proposal in the budget or State of the Union Address. They were deeply disappointed that Bush simply ignored their work. According to press reports, he didn’t even thank the commission members for it.
Given this history, it’s hard to believe that people of stature will waste their time on yet another disposable commission report, especially when everyone knows that there is not enough time left in this administration to do much of anything meaningful. According to press reports, former Federal Reserve Chairman Alan Greenspan, who chaired a successful Social Security commission in the early 1980s, politely turned down the opportunity to chair this new commission.
The second reason why Bush’s call for an entitlement commission is laughable is because he is largely responsible for the growing crisis of entitlement spending. That is because he rammed a vast expansion of Medicare through a Republican Congress in 2003 that increased the unfunded liability of that program by almost 40 percent. According to Medicare’s trustees, the unfunded liability of Medicare is $68.1 trillion. Of that, $18.2 trillion is accounted for just by the new drug benefit.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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