Despite its unpopularity, the tax code overhaul seems to have enough Republican votes to pass in the Senate. After almost a year of comic pratfalls in Congress, the GOP is set to realize some of the agenda on which its members campaigned over the course of the last half decade—campaigns that won them total control of the federal government. Republicans shouldn’t expect any laurels for their efforts. Things are only going to get harder from there, particularly if they move on to the next logical and most urgent phase of the Republican Party’s long-stated mission: reforming entitlements. Already, the journalistic and Democratic political establishments are stoking as much consternation over that necessary project as possible.
Senator Marco Rubio has become the initial focus of those who are posing utterly scandalized by the notion that America’s bloated and unsustainable entitlement programs are in desperate need of reform. Rubio was recently caught delivering what the website Financial Advisor described as a talk to “a group of Washington, D.C., lobbyists and policy analysts this morning at a Politico Playbook Interview sponsored by the Financial Services Institute,” in which he confessed that tax code reform is a prerequisite before tackling entitlements.
“Many argue that you can’t cut taxes because it will drive up the deficit,” Rubio said. “But we have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.” He added that it was not necessary to curtail benefits for “current retirees or even near-term retirees,” but it would be essential to reform these programs for younger beneficiaries now “so the changes will barely be felt.”
To this, the liberal establishment erupted in indignation. “The hat trick of corporate influence,” wrote Adam Smith, director of the Democratic activist organization Every Voice, “tell lobbyists at a Wall Street-sponsored event that you want to cut Social Security.” As if it wasn’t bad enough that tax code reform was “handout to special interests and the wealthy,” the intern who mans the House Democrats’ twitter account insisted, Rubio had revealed that “Republicans want to cut Medicare and Social Security to pay for it.” Even journalists got into the game. “Hmm,” Washington Post fact-checker Glenn Kessler pondered, marveling over Rubio’s confession. “This Is Big,” author and former New York Times labor reporter Steven Greenhouse moaned in awe.
You could be forgiven for thinking that Rubio had made an admission against interest, and to a sordid room full of wealthy investors and swamp-dwelling lobbyists, no less. That would be the case if Rubio and his colleagues had not been saying this same thing in almost precisely these words to anyone willing to listen for at least the last three years.
In 2015, Rubio joined Sen. Mike Lee in crafting a tax code reform proposal designed to reduce individual rates, broaden the base, and stimulate economic growth. Then, as now, these two senators were criticized from the left and the right both for preserving social engineering in the form of substantial child tax credits and for generating large deficits. Then, as now, Rubio dismissed these concerns. “This plan is the growth side of the equation,” he said at the time. “This plan is designed to create the dynamic growth that we need.”
In a subsequent op-ed published in National Review, Rubio expanded on how his tax code reform plan represented the first step on the road to the reformation of retirements, specifically Social Security. He advocated a reduction in the growth of benefits for retirees who could afford it, a gradual increase in the retirement age, and the elimination of taxes on interest, capital gains, and dividends to incent Americans to save more during their prime working years.
The revenue loss associated with the Rubio-Lee plan spooked the plan’s critics. In a year in which GDP growth remained anemic, the notion that growth alone would pay for the lost revenues and, eventually, reforms to non-discretionary spending programs like entitlements seemed fanciful to many. Nevertheless, that was the senator’s contention. “You have to have the spending discipline on the mandatory spending programs and you need sustained, significant economic growth,” Rubio told CBS News. “You have to do both.”
“You can’t get there from cuts alone, you need the growth component,” he added. “That’s why the reforms of the mandatory spending programs is so critical, because those programs will bankrupt themselves.” He’s right. In 2017, the trustees who manage Social Security’s big trust fund revealed that the program will reach insolvency in 2034. Medicare’s hospital trust fund is on pace to go broke in 2029. Non-discretionary spending already absorbs almost 70 percent of the federal budget. Even if it were possible to identify every instance of “waste, fraud, and abuse,” the elimination of such evils will not save these programs. Confiscating the wealth of every single millionaire and billionaire in America would purchase mere minutes on the doomsday clock. These programs will have to be reformed sooner rather than later.
Democrats and their sympathizers in media can pretend they haven’t heard Republican incessant warnings on this subject, but their theatrical displays of shock over comments like Rubio’s only suggest they haven’t been paying attention. The most avoidable financial crisis in modern American history is coming. The Republicans who observe this empirical fact are not the problem, even though their liberal detractors do put on a good show in acting as though they were.