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ONE PARTY
THE
INCUMBENT PARTY

©2007 Wall Street Journal

On the 13th of April, 2007, "The Incumbent Party" appeared in the Wall Street Journal.

The writer declared one party a winner in the budget battle. The economic policy of this 535-strong political caucus is designed to prevent any bad news from reaching voters. Despite their public disputes, both the Democratic and Republican wings of the Incumbent Party adhere to the same fundamental principle.

Who knew they had principles?

The writer listed them, as excerpted below:

  • Pretend to budget for the next five years while offering instead a one-year political fix. Neither wing offers any lasting solutions, only budgetary gimmicks.

  • Nod gravely when America's long-term fiscal problems are mentioned, but argue that today's budgets have almost nothing to do with the unsustainability of Medicare, Medicaid and Social Security. After all, most of today's elected officials will be safely retired — and some buried — before these entitlement programs collapse.

  • When pressed, bemoan the fact that every American's share of the national debt is $29,000 and growing. Forget that a more accurate, audited figure is $170,000 each, or $440,000 per household.

  • Pledge to protect Social Security and Medicare "trust funds" without hinting that those trust funds do not exist. Today's Social Security surpluses are invested in U.S. Treasury bonds, which enable government spending on everything except future Social Security benefits.

  • Promise Social Security and Medicare benefits that the Social Security actuary says are not even promises, much less vested benefits. They are only "scheduled benefits," which can be rescheduled, or eliminated, at any time by any Congress. Rescheduling is even easier to do when Congress refuses to record today's benefit levels on any federal balance sheet.

  • Ignore the fact that the federal budget deficit would be at least twice as large if you were not using the Social Security "surplus" to hide its true size. The use of this fig leaf is particularly ironic when, if Social Security and Medicare were properly accounted for, the annual federal fiscal gap would be roughly $4 trillion, or 10 times larger than any politician will admit. This annual gap is larger than the entire federal budget of $2.9 trillion.

  • Shamelessly exempt the federal government from normal Generally Accepted Accounting Principles (GAAP), making it the only large entity in America -- private or public -- able to flout the rules.

  • Subsidize employer-sponsored health insurance by offering the biggest federal income tax breaks to the people who need it least: high-wage employees of large companies.

  • Keep median cash incomes stagnant for decades while fringe benefits, particularly for health insurance, consume most employee productivity and profitability increases. Deny that any tax vacuum exists that sucks up every worker's pay raise and transfers it to the health sector of the economy.

  • Never even whisper that Standard & Poor's has projected that by 2012, when the budgets of both wings of the Incumbent Party claim to be producing surpluses, the U.S. Treasury bond will lose its AAA rating. Even worse, S&P is also projecting that Treasuries will become junk debt by 2025.


From an essay written by Jim Cooper, a Democratic Congressman from Tennessee.
 

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