Deficit-Minded Republicans Eyeing Entitlements

The battle to control the federal deficit is shifting ground, ever so slowly, to Social Security, Medicare and the other giant benefit programs that account for a growing share of spending.

President Bush, in the fiscal 2006 budget that he is to present to Congress on Feb. 7, is expected to resurrect a failed proposal from last year that calls for increases in benefit programs to be offset by decreases of equal size from other benefit programs.

But congressional Republicans may try to get out ahead of him. Although lawmakers have no firm targets for benefit cuts, at least one influential senator -- Budget Committee Chairman Judd Gregg of New Hampshire -- is laying plans to institute a procedure that would make it harder for Democrats to block benefit cuts.

“This is a chance to awaken the discussion,” Gregg said. “I don’t expect to resolve it, [but] I hope we can kick off the ball and get things rolling.”

Gregg said he believed lawmakers were more serious about deficit reduction than at any time in recent years, because they had heard an earful from voters about runaway red ink.

“This is going back to our roots as the Republican Party,” Gregg said. “A lot of the people who support us expect us to be fiscally responsible.”

Such talk has put advocates for those who rely on the benefits programs on edge.

“It is a serious threat,” said Richard Kogan, a senior fellow at the liberal Center on Budget and Policy Priorities. “This is going to be a year when people like us are going to be on the defensive.”

The procedure favored by Gregg has not been used since 1997. It has the support of House Budget Committee Chairman Jim Nussle (R-Iowa), said Sean Spicer, committee communications director.

Every year, Gregg’s committee prepares a resolution that sets a limit on overall spending and tells other Senate committees how much they can spend on programs in their jurisdiction.

Gregg said he planned to attach language to this year’s budget resolution instructing the committees with jurisdiction over some of the entitlement programs to cut them. The committees’ cutbacks would be packaged in a single “reconciliation” bill, so-called because it reconciles those spending plans with the budget resolution.

The procedure could make a big difference in what legislation Congress enacts.

Senate Democrats can filibuster ordinary legislation, and the Senate’s 55 Republicans are not enough to produce the 60 votes necessary to break a filibuster and force legislation to a vote. But congressional budget rules dictate that a reconciliation bill cannot be filibustered.

All Republicans need are 51 of the 100 senators to pass a reconciliation bill. Gregg’s plan would allow senators to approve budget cuts with a simple majority, rather than the usual 60 votes.

“There’s no way to restrain entitlement programs without reconciliation,” Gregg said.

The reconciliation maneuver has been in mothballs since 1997, when lawmakers used it to produce a bill to save $160 billion over the following five years. The cuts helped usher in four years of budget surpluses.

Since then, the deficit has ballooned, to $412 billion last year. Gregg, who is new to the Budget Committee’s chairmanship this year, said the chief culprit was the growth of the giant entitlement programs -- so-called because they entitle people to federal benefits according to their age, income or some other characteristic.

A quick glance at the budget numbers shows why entitlements loom so large. The biggest, Social Security, will entitle the elderly and disabled this year to checks totaling about $510 billion, one-fifth of the federal budget. Medicare benefits for the same groups will cost an additional $325 billion.

In comparison, the programs that Congress can enlarge or reduce annually in its regular spending bills are very small. Economic development grants to poor communities, a traditional target of budget cutters, will cost an estimated $4.6 billion this year. The government will spend about $1.2 billion this year to subsidize passenger railroad travel on Amtrak.

But the bigger a program is, the more people benefit from it -- and have a stake in keeping it intact.

Altogether, entitlement programs will soak up about $6 of every $10 the government spends. By contrast, discretionary domestic spending, excluding defense, accounts for less than $2, and it has already been squeezed in past rounds of spending cuts.

Congress has a long history of acting in futility when it comes to entitlements.

In 1985, it passed the Gramm-Rudman-Hollings Act, which mandated a balanced budget by 1991 (later pushed back to 1993). Across-the-board spending cuts were supposed to be triggered if annual deficits exceeded the targets along the way.

Twice the spending cuts loomed, and twice they were averted. In 1989, President George H.W. Bush signed a spending cut order, but it was rendered moot when Congress passed a deficit reduction package.

In 1990, rather than face a round of Gramm-Rudman-Hollings cuts, Congress replaced the law with new procedures, including a requirement that any legislated increases in entitlement spending be accompanied by offsetting reductions. Every time the new rules would have applied, Congress waived them, and they expired in 2002.

In 1994, a commission appointed by President Clinton to figure out how to rein in entitlement spending failed to mobilize a majority in favor of any strategy.

Last year, Congress flirted with a cap on future entitlement spending. By a lopsided vote of 326 to 88, the House trounced a proposal mandating automatic cuts from entitlement programs, excluding Social Security, if Congress failed to cut them by $1.5 trillion over the next decade. A less drastic, $445-billion proposal also exempting Medicare did not fare much better.

House Majority Leader Tom DeLay (R-Texas), who voted for the measures, said after the debate that it would clear the way for a more serious run at entitlement control this year.

This year, Washington’s conservative policy research organizations boast a surplus of ideas. One that is often mentioned, dubbed the “Taxpayers’ Bill of Rights,” comes from Brian M. Riedl, lead budget analyst for the Heritage Foundation.

Under this plan, total federal spending could grow by no more than the percentage of population growth plus inflation. If spending exceeded this level and Congress did not pass legislation to bring it back into line, the administration would slap across-the-board cuts on discretionary spending programs.

Riedl says that in the last five years, when spending grew by 6.4% a year, the taxpayers’ bill of rights would have limited it to 3.3%. That translates into $4 trillion less in spending than is now projected over the next decade.

Riedl’s proposal strikes many other budget analysts as unworkable. Robert D. Reischauer, president of the Urban Institute and former director of the Congressional Budget Office, points out that entitlement spending is rising not just because of overall inflation and population growth.

Social Security and Medicare costs are growing with the elderly population, which is increasing much faster than the population as a whole. And medical inflation, which greatly exceeds general inflation, is driving up the cost of Medicare and Medicaid. Reischauer says caps have never succeeded because Congress has never been willing to enforce them.

“It’s a way to appear to be tough,” he said. “It’s a way to avoid pulling the trigger on the gun.”