Who Rules America? Retired People
Samuelson, Robert J., Newsweek
Byline: Robert J. Samuelson
In the deficit crisis, we're held hostage by the senior lobby.
The great question haunting Washington's budget debate is whether our elected politicians will take back government from AARP, the 40 million-member organization that represents retirees and near retirees. For all the partisan bluster surrounding last week's release of President Obama's proposed 2012 budget, it reflects a longstanding bipartisan consensus to not threaten seniors. Programs for the elderly, mainly Social Security and Medicare, are left untouched. With an aging population, putting so much spending off-limits inevitably means raising taxes, shrinking defense, and squeezing other domestic spending--everything from the FBI to college aid.
Power is the ability to get what you want. It suggests that you control events. By these standards, AARP runs government budgetary policy, not presidents or congressional leaders. Obama says we must "win the future," but his budget (and, so far, the Republicans' too) would win the past and lose the future. The massive federal debt would keep growing because, without restraining spending on retirees, there's no path to a balanced budget. Our aging infrastructure (highways, bridges, airports) wouldn't get needed repairs. The social safety net for the growing ranks of poor Americans would be further strained. We would cut defense while China's military expands. All this is insane. It's not the agenda of a country interested in its future.
But it's our agenda. Look at Obama's budget. Under his proposals, annual federal spending rises from $3.7 trillion in 2012 to $5.7 trillion in 2021. Social Security, Medicare, and Medicaid (the three major entitlements) account for 60 percent of the projected $2 trillion increase. Higher interest payments on the debt--mainly reflecting our inability to control big entitlements--account for an additional 31 percent. Altogether, that's 91 percent of the increase; the rest of government accounts for 9 percent.
Indeed, when corrected for expected inflation and population growth, the rest of government shrinks. A table (S-6) in Obama's budget shows this clearly. From 2012 to 2021, annual spending on defense and homeland security would drop 21 percent after inflation and population adjustments. …