Parties divided on entitlements

GOP and Democrats disagree on the urgency of addressing the long-term solvency of Social Security and Medicare.

from the October 29, 2007 edition

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Republicans call that a tax increase, and would never stand for a complete lifting of the cap. The ultimate solution to the structural problems of entitlements is likely to be a combination of benefits reductions and tax increases, and the sooner action is taken, the less Draconian the solutions – especially as the big demographic wave known as the baby boom begins to retire, budget experts say.

For now, candidates are focusing on getting nominated, and are appealing to key constituencies with their own parties. Former Senator Thompson, who entered the race only last month, has sought to make inroads with fiscal conservatives with his talk on entitlements. Unlike the other candidates, he has made the issue a regular theme in his stump speech, and maybe more important, it's the issue that really seems to get him going.

"The one thing that all the experts agree on … is that we're in an unsustainable position economically with regard to these programs," he recently told the anti-tax Club for Growth. "You'd think that would be the biggest thing we could talk about, other than national security. So we've got to talk about it."

Thompson intends to unveil a plan for entitlement reform in the coming weeks, according to his spokesman, but he has already been floating ideas, such as slowing the rate of Social Security benefit increases – a move that would, in effect, cut benefits. On Medicare, he suggests increasing fees for upper-income beneficiaries. To imply such moves puts Thompson in danger of touching the so-called "third rail" of politics – and he acknowledged that risk in a speech last month he gave to The Club For Growth.

But he gets credit, at least, from deficit hawks, who have been touring the country trying to educate the public on the structural problems in Social Security and Medicare. "There is an opportunity for leadership on this issue, because people are not expecting politicians to tell them the truth on this," says Bob Bixby, executive director of the anti-deficit Concord Coalition. "And while you would certainly catch fire from your opponents by putting forth specifics, I think the public would respect that person as a leader for taking a position."

If the issue gets more heated as the campaign progresses – especially when the parties have nominees, and the partisan divide on issues grows sharper – there's a danger that candidates will get locked into promises that make an eventual compromise harder to achieve.

But at the same time, analysts say, public debate is needed in order for the shape of an agreement to emerge. "This is the kind of issue that takes a couple of years to develop a consensus around a solution," says Stan Collender, a budget expert at Qorvis Communications.

[Editor's note: The original headline and subhead incorrectly stated that Republican Fred Thompson alone among the '08 candidates was tackling the issue.]

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