Arnold Kling  

Proposal for a Moral Budget

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I claim that it is immoral for government to make promises that it does not expect to keep. Today, on the CBO Director's blog, there is in analysis of a proposal that would satisfy my criteria for morality.


The Roadmap, in the form that CBO analyzed, would result in less federal spending for Medicare and Medicaid as well as lower tax revenues than projected under CBO's "alternative fiscal scenario" described in CBO's June 2009 publication The Long-Term Budget Outlook. Federal spending for Social Security would be slightly higher than under CBO's alternative fiscal scenario for much of the projection period, but the system would become sustainable as revenues increase and traditional benefits decline. The budget deficit would peak at 5 percent of GDP in 2034 and then decline. By 2080, the Roadmap would generate a budget surplus of about 5 percent of GDP.

How it works:

Traditional retirement benefits [Social Security] would be reduced below those scheduled under current law for many workers who are age 55 or younger in 2011...

eliminate the income and payroll tax exclusions for employment-based health insurance...the current tax exclusion for employment-based health insurance would be replaced by a refundable tax credit for the purchase of health insurance...

The age of eligibility for Medicare would increase incrementally from 65 (for people born before 1956), as it is under current law, to 69 years and 6 months for people born in 2022 and later. Starting in 2021, new enrollees would no longer receive coverage through the current program but, instead, would be given a voucher with which to purchase private health insurance...

There is more. The proposals are quite far-reaching. They make the Obama agenda seem tame by comparison. What they illustrate is a set of ideas that would be sufficient to achieve a long-term fiscal outlook that is responsible. One can argue--and many people no doubt would argue--that such proposals are not necessary to achieve fiscal responsibility.

I think that it useful to have the analysis out there, because that shows that it is possible to propose a moral budget. It would be nice if the fiscal policy debate had to work within the perimeter set by only making realistic promises to future government beneficiaries. There would be plenty to argue about within that perimeter, but the arguments would take place within a context that is moral and reality-based.


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COMMENTS (4 to date)
Yancey Ward writes:

Arnold,

It isn't hard to come up with a sustainable plan. That was always the easy part.

mulp writes:

Such a proposal would get support from about zero conservative Republicans, so it is a non-starter.

Obama's health reform guidelines were built on the current system without any real change to the way people get their health insurance, it he was attacked as a radical leftist. Here you endorse a radical change, so you are clearly in conservative Republican terms, an extreme radical leftist.

The two bills passed by Congress are minor changes compared to what you have endorsed, and it is too radical.

And as someone paying, at 62, $9400 for a $5000 deductible individual policy without have a preexisting condition that put me into a high risk pool, a 20% increase over the prior year, I can't say that I would trust insurers to offer a fair deal to my niece and nephew, so that a voucher would be sufficient to buy any meaningful insurance policy. I'm already spending more for insurance and minimal doctor visits and tests, refusing to have those recommended tests like colonoscopy because I'm gambling on reaching 65 without problems that will make that a bad decision.

To argue that private insurance works at the individual level in the US just can't be made, so I really question the idea that we can throw the millions who can't get a fair deal on insurance to a failed market is really a leap of faith.

Would it be moral to say to millions of people "sorry, but we can't afford your health problems, so you will be left to your own limited devices and death in order to maximize free market profit."

tjames writes:

Is satisfying this single criteria both necessary and sufficient for a moral budget? I would have thought your original criteria - "that it is immoral for government to make promises that it does not expect to keep" - to be only a necessary condition, and not a sufficient one. In other words, as a necessary condition, a moral budget must at least make reasonable fiscal promises it expects to keep.

There are many other dimensions of moral that could be checked as well - are the real needs of the citizens being met (and do we even agree on 'real' in this context), are the collections of revenue and disbursement of resources just and fair, etc.

On another note, I see this bill as essentially useless. Yes, it has a bunch of nice numbers and projections, but does not address the problem that Congress is comfortable with the overspending. Does this bill make that impossible? Because if it does not, then as soon as we start to approach balance, Congress will let loose with more spending, more tax cuts, or both. It's not the budget that is failing your morality criteria - it's the politicians. How does this bill change *them*?

John T. Kennedy writes:

This obviously isn't a moral budget because you still have to steal money to pay for it.

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