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Trumped-up War Between the Generations

A Commentary By Froma Harrop

Friday, April 19, 2013

During the big health care fight, the right told older Americans that Obamacare was grabbing money from their Medicare and giving it to young people. Now it tells young workers that Medicare and Social Security are draining their take-home pay to support retirees sitting around the pool.   

The story, it would seem, moves from the young taking from the old to the old taking from the young. The one constant here is the motive: to weaken public support for government programs offering Americans a modicum of economic and health care security.   

We can all agree that entitlement spending must be contained. The "how" of it is a big question. But the answer cannot be intergenerational warfare. And it need not be.   

The storyline of the young being stripped by their elders has gotten a good deal of traction. Witness this headline on Charlie Cook's National Journal column: "Democrats Risk Alienating Young Voters by Opposing Cuts in Entitlement Spending."   

Cook was referring to many liberals' complaints about President Obama's proposed budget, which would cut entitlement spending by about $800 billion over 10 years. Among other things, the plan would ask Medicare beneficiaries, particularly the well-to-do, to pay more. Most controversially, it would change Social Security's inflation formula in a way that would lead to smaller cost-of-living raises.   

Obama's budget would begin to correct the imbalance reflected in the Urban Institute computation that Washington spends seven times as much per older American as it does per child. It would increase spending on education, on infrastructure, on research, on jobs -- programs aimed at boosting an economy that has not been kind to younger workers.   

This may be so, and that's no bad thing. The trouble with this conversation is that it avoids the real reason we're having it. Yes, Medicare costs need restraining. And altering the inflation measure in Social Security -- a program that's holy ground for many liberals -- could be an acceptable, if painful, concession in budget talks.  

But the origin of this phony war between the generations isn't so much how the budget pie is being cut by age group. It is the size of the pie.   

Years of reckless tax-cutting has eaten away the revenues available to meet many national demands. This was the big rationale for cutting taxes. If you want to shrink government, conservatives kept saying, you have to cut off its allowance.   

So all this carping in the richest country on earth that there's no money to fix the bridges -- and that if it weren't for all those oldsters' entitlements, we'd have it -- is absurd. So is the spiel that we can't guarantee health coverage to younger Americans without harming the elders' medical benefits.   

The right talks about Obamacare as though achieving universal coverage were some kind of moonshot. Almost every other industrialized country has been doing it for decades.   

Obama's budget offers a clever means of giving conservatives some of what they want, but it also names a price for them: $700 billion in new tax revenues. The proposal's main idea, limiting itemized deductions for the richest households, is well-chosen.   

Rather than engage in hand-to-hand combat over ending this tax break or that one, lawmakers could simply put a cap on the total taken. That doesn't mean all loopholes make equal sense. (Some, such as the deduction for mortgage interest, should be phased out.) But smart tax reform is going to take time that we don't now have.   

One last point. The aging baby boom generation will be large and expensive, but its members will eventually pass on, and the ratio of workers to retirees will stabilize. In sum, no generation need be the enemy of another.

COPYRIGHT 2013 THE PROVIDENCE JOURNAL CO.

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