DAVID BROOKS: The Entitlements People

NYT

If you live in Washington or just visit for a few days, you may run into the entitlement people. Some of them are former senators, cabinet officers or other previously powerful folks. Others are maverick members of Congress or agency heads, who are not in a position to set policy but are prominent enough to get noticed.

They bombard you with alarming statistics about unsustainable entitlements. The U.S. government has $43 trillion in unfunded liabilities, or $350,000 for every taxpayer. Standard & Poor’s projects that in 2012, the U.S. will lose its AAA bond rating.

Everyone listens and puts on a long face to show that they, too, are gravely concerned. The facts are indisputable, and everybody agrees abstractly that something really must be done. But then the conversation is over and most people are relieved to slip back into a different reality.

In the different reality, everybody plays by Mardi Gras rules. The norms are different, masks are worn and certain unpleasant facts fall away. Presidential candidates vow to offset the cost of health care plans through “cost savings” measures, and everybody pretends those savings are actually real. Republicans promise tax cuts and people pretend those pledges are not absurd. Democrats vow to pay for their grand spending plans by raising taxes on the rich, even though each one percent increase in the top tax rate only produces $6 billion in revenue.

The Mardi Gras norms are built on a fiction — that the current budgetary path is sustainable — and once you enter that fiction, then all sorts of other fictions become necessary and trickery piles upon trickery until all the standards of behavior are turned upside down.

These habits infect everything they touch, even a straightforward and successful program like the State Children’s Health Insurance Program, or S-chip. According to the Centers for Disease Control, the number of uninsured children has been declining steadily for years. It shouldn’t be that costly or hard to insure the ones that are left.

And yet because S-chip is a product of the current climate, the expansion plan in Congress has all sorts of corruptions and dishonesties built in. First, it perpetuates a smoke screen of obfuscation between who pays and who chooses. States have an incentive to ramp up benefits because they know that most of the cost will be borne by taxpayers somewhere else. Second, it entices children out of private and into public insurance, even though after 2012 it cannot cover the cost.

Third, it creates a fund-raising mechanism cowardly in the extreme. Politicians in Washington like to talk in the abstract about shared sacrifice. They could go to the American people and say: We need to insure more children and to do that we’re going to raise broad-based taxes slightly.

But that’s honest and direct, and therefore impermissible. Instead, this program is funded by raising taxes on smokers, who generally are much poorer than average Americans and much less educated. High school dropouts smoke at roughly three times the rates of college graduates.

They are also among the most demoralized people in society. Recent sociological research shows that most Americans regard smoking as a sign of low-class, unattractive behavior — and most smokers see it this way, too. Research by Kip Viscusi of Harvard suggests that smokers actually overestimate the dangers of their habit; they believe they are killing themselves even faster than they really are.

The S-chip bill takes money from these relatively poor, politically immobilized people and shifts it to those making up to $62,000 a year. Nobody is raising a tax on wine consumption or gasoline consumption to pay for this benefit. Instead, Congress is taxing the weakest possible group in order to shift benefits to others, some of whom are middle class.

There’s always been trickery in budgeting and sin taxes are far from new, but somehow over the decades there’s been a revolution in morals. Deficits, obfuscations and trickeries that were once unthinkable are now the norm.

It is a truth of human nature that people both agree with and resent the fogies who object. And yet, there they were this week. Democrats and Republicans like Frank Wolf, Jim Cooper, Judd Gregg, Kent Conrad and George Voinovich introduced legislation to create an entitlements commission with teeth. The commission would come up with a plan to restore fiscal balance, and the plan would immediately go to Congress for an up-or-down vote.

The commission probably couldn’t control underlying health care costs, which are driving all this. But it would at least define deviancy upward, and puncture the Mardi Gras rules. And everyone nods, approves and looks away.