The same kind of unintended consequences result from another sacred cow: extending unemployment benefits. The federal subsidy, which allows the unemployed to collect checks for longer periods, has actually prolonged unemployment for some workers. It discourages recipients from taking jobs they might have accepted if they had no alternative source of income. And the list goes on.
The House GOP spending cuts aren't the last word on reducing the deficit. They're a good first start, but the real challenge remains tackling the entitlement programs: Social Security, Medicare and Medicaid in particular. As the American population ages, these programs will bankrupt us unless major overhauls are undertaken.
According to a recent study by the Urban Institute, a single man who turned 65 in 2010 and earned average wages would receive $417,000 in benefits over his lifetime but would have paid in only $345,000 in Social Security and Medicaid taxes. A couple, in which one earner was in a high-income bracket and one was in the average bracket, would receive $988,000 in benefits, but would only have paid in $881,000.
Who pays the difference? Current workers, that's who.
Their taxes pay for current recipients' benefits; and those workers have to hope there will be a supply of even more highly taxed workers in the future to pay for theirs once they retire. It's really a giant Ponzi scheme -- the kind of racket that would send someone to jail if they tried it in the private sector.
The Republicans have started a conversation on debt reduction by taking on some liberal programs that, in the past, would have been safe from the knife. Now it's time for Republicans to initiate an even more difficult conversation by figuring out how to cut middle-class entitlements. But don't count on Democrats to make it easy.
Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .
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