Will 'Generational War' Replace 'Class War'?

Posted by: Dan Beucke on October 31, 2011 at 5:00 PM

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It’s looking dicey for the Congressional “super committee” that’s charged with slicing $1.2 trillion from the federal budget. If it falls on its face, as many people believe, expect the talk about “class war” to be joined by charges of “generational war.”

A failure by the committee to come up with a plan in the next three weeks — or Congress to pass a plan by Dec. 23 — forces massive cuts in discretionary programs while protecting the two entitlement programs nearest and dearest to the hearts of older Americans: Social Security and Medicare. Because those two programs together accounted for more than 40% of federal expenditures in 2010, the bulk of the cuts will fall on spending for defense and — according to some analyses — children and education.

That’s the gist of a story today from Bloomberg, which cites research by the nonpartisan Federal Funds Information for States and other groups. To quote the piece:

Title 1 funding for low-income students, the Head Start health and nutrition program, Child Welfare Services, and vaccines are among items likely to be hit by the automatic cuts if a congressional panel can’t agree on a debt-reduction package of at least $1.2 trillion.

Kids lose out for a couple reasons: 1) they don’t vote and seniors do, 2) their advocacy groups don’t have the lobbying muscle of AARP. Political budget gridlock also works for seniors and against kids, as Republicans refuse tax increases to fund discretionary spending and Democrats block spending cuts for entitlement programs. To quote Bob Bixby, head of the Concord Coalition: “You’ve got a ‘hell no’ to benefit cuts and ‘hell no’ to tax increases, and those are two very powerful political constituencies.” AARP is “squeezing the heck out of the future” and “programs for kids,” he told Bloomberg. (AARP responds that “as long as members of Congress continue to target seniors and future retirees as if they were mere line items in a budget, we can’t have a conversation about how to strengthen Medicare and Social Security.”)

The question of how age groups should share the burden of debt reduction was bubbling away long before the GOP House decided to play chicken with the debt ceiling. The recommendations of the Bowles-Simpson National Commission on Fiscal Responsibility and Reform issued last fall arguably gave Baby Boomers a pass. And Michael Kinsley kicked up a storm with his Atlantic magazine cover story that suggested using a massive tax on Boomers’ “unearned inheritance” to cover the federal budget deficit.

But does this really qualify as “war”? Maybe more like a sideshow, reflecting the election cycle and the power of denial in Washington. Congress may whiff this time, but no one who’s serious about the budget deficit believes it can be brought into line without eventually trimming the two big retirement programs. And if that doesn’t happen, future generations will have a much bigger gripe against their elders than cuts in school spending.

(Photographer: Martin Palm / Link Image)

Reader Comments

Good2go

October 31, 2011 10:32 PM

Oh my, how partisan is this? This article buys into assumptions that are a bit dicey at best. The first is that the deficit is due to spending, which it is not. The second is that Social Security is in trouble, which it is not. And that's just for starters. These concepts are so well understood by responsible journalists that I have to assume the reporter is trying to make the news rather than report it. Tis piece is not worthy if Bloomberg if it wants to make itself a major news source.

danielwasinger45

November 1, 2011 7:36 AM

My wife and two children and I live in the state of Illinois. Our current health insurance plan is a Choice Plan that is provided by "Penny Health" . The plan itself is a consumer driven health care plan.

loren salmonson

November 1, 2011 1:26 PM

just how stupid is Bloomberg? Especially given OWS all across the world, to ignore the need to first of all, just as an initial tiny reform, to tax the millionaires! Quote "but no one who’s serious about the budget deficit believes it can be brought into line without eventually trimming the two big retirement programs," is an amazingly stupid statement on so many sides!

jarrott heath

November 1, 2011 5:59 PM

Laughable editorial...as Europe collapses under the weight of its own debt, Bloomberg still tries to portray Congress as irresponsible for trying to reign in spending. Can't wait for the Bloomberg math tutorial.

Ignore!

November 2, 2011 4:51 PM

"The question of how age groups should share the burden of debt reduction was bubbling away long before the GOP House decided to play chicken with the debt ceiling."

Proof above of how biased this piece of garbage is. Ignore! Businessweek is owned by Bloomberg, big fat dummy liberal...go figure.

Walt Schneider

November 3, 2011 12:23 AM

Social Security and Medicare are funded by payroll taxes. The problem is that the General Fund can't steal the excess taxes collected for these two programs that they were able to in the past.

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"The Wealth Debate" is a running discussion of wealth, poverty, the economy and income inequality in the U.S. and the world. It was started shortly after the Occupy Wall Street movement sparked a global protest about the fallout from the financial crisis and money in politics. You can reach the editors, Dan Beucke and Mark Gimein, by email, or follow BloombergNow on Twitter to keep up with posts.

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