Sometimes compromise isn't all it's cracked up to be. The latest example is the agreement reached by Republicans and Democrats to extend the payroll tax cut.
As G.K. Chesterton put it more than a century ago, "The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected." The payroll tax cut proved Chesterton right on both counts.
Continuing to give 160 million working Americans more take-home pay through a payroll tax cut may have value as the country climbs out of the Great Recession. But in doing so, Democrats are undermining the future solvency of Social Security (a program they usually defend from any incursion), while Republicans (who of late are loudly defending tax cuts for the wealthiest) are now in no position to propose ending the payroll tax cut for working families.
For decades we have known that baby boomers would overwhelm the Social Security system. Already, the system is no longer raising enough revenue to cover annual benefits. Yet, amazingly, now is the time both parties have conspired to reduce the program's revenues. Worse, they offer no mechanism to replace the dollars lost to the payroll tax cut. Consequently, they make fixing the program's long-term shortfall more challenging and difficult. That is the kind of bipartisan behavior we do not need.
The other elements cobbled into the payroll tax bill are also dubious. Arguments can certainly be made for avoiding deep cuts in Medicare payments to doctors (dubbed the "doc fix") and for extending unemployment benefits. Unfortunately, like Social Security, what we need aren't more stop-gap solutions, but rather meaningful, long-term policy reforms.
Let's look at the "doc fix." For too long the costs of Medicare and Medicaid have been cut by shifting those costs to those with private insurance, or to physicians, hospitals or other providers. Without the "doc fix," doctor payments were slated to fall by more than 20 percent. That is bound to have a huge effect. In Minnesota, for example, Medicaid pays dentists too little to cover the cost of care -- leaving low-income people with no dental coverage at all because many dentists choose not to participate. A smarter approach would be to change the relationship between health care consumers and providers. Thankfully, in Minnesota, there is now increasing focus on what is called "Triple Aim" -- designed to deliver better health and better care at lower costs. In other words, reform that works.
Now, what about unemployment insurance? Especially in an election year, with 8 percent of the workforce unemployed, it is unlikely that politicians would vote to curtail unemployment benefits. While the costs of the payroll tax cut and the "doc fix" were simply added to the deficit, these unemployment costs are to be financed by a change in federal worker contributions to their retirement program. Every fiscal expert agrees that the federal pension program is in need of major change simply to address its own long-term solvency. However, these revenues now will be siphoned off for a one-time extension of unemployment benefits.
The real lesson in this payroll tax cut bill is that, on closer examination, the whole is so much worse than the parts. As two individuals who worked in Congress at a time when big issues -- such as tax reform, deficit reduction and immigration reform -- were addressed responsibly and in bipartisan fashion, we know that it can be done. Our purpose in this column, and columns to follow, is not to solely lay blame on the Democrats and Republicans for their failures (though we will certainly do so when warranted) -- but to lay forth both policies and a pathway toward the kind of bipartisanship that can deliver results on the important issues of the day.
