Friday, January 07, 2011

Here's Hoping.

There's been a lot of commentary about an interview that The New York Times conducted with Indiana Governor Mitch Daniels. It's worth reading in full. I was particularly struck by what Governor Daniels said at the end.


Mr. Daniels: I start from a premise that not everyone would agree with, I guess. I believe the American experiment is in mortal peril because of the debt we have coming….

This is more frightening than even the Soviet nuclear threat, which would have been more horrible. If we go broke, we’ll still be alive, but the probability was so small. In this case, the damage, the catastrophe, will be very, very severe, and the probability – I mean, and it’s inexorable

Q: Absent action.

Mr. Daniels: Absent action, yeah. The probability, I think, sadly, is very high.

I was struck by this because I think it's true and because I think a huge cross-section of the electorate also thinks it's true or that it might be true. And that this "mortal peril," as Daniels calls it, is the central political issue of our time. And that the probability that we, as a nation, will not take action is, indeed and sadly, very high.

I wrote about this last year in a somewhat ponderous piece about the disconnect between President Obama's political agenda and the reality of our situation. Someone wrote me an email yesterday asking if I was "relieved" that Bill Daley was taking over as White House Chief of Staff. I like and admire Bill Daley. He's arguably the best fixer in the Democratic Party and I have a keen appreciation of the role that fixers play in making government work. They are essential.

But I'll be a lot more relieved when President Obama starts saying that he too thinks "the American experiment is in mortal peril because of the debt we have coming." And then starts to take action to deal with the overwhelming obligations that loom, just around the corner. The truth is that only a Democrat can "fix" Social Security. Only a Democrat can restructure Medicare back into a much leaner "basic" health care coverage plan. Republicans don't have the political standing (on these two issues) to do so.

Social Security and Medicare/Medicaid are the mother of all unfunded liabilities and if we don't do something about them in the next seven years, they will literally eat us alive in the 2020s. The Bowles-Simpson Commission on Deficit Reduction did an admirable job of making clear what happens if we don't deal with these obligations. In three words, we'll go broke. And if we go broke, then the American experiment will come asunder and not gently.

These next 1-3 years will determine which way the tide turns. One hopes that President Obama understands this and addresses it forthrightly in his State of the Union Address. If he does, he will, in all future debates, have the truth on his side, since it is inarguable that we cannot continue down the path we are on.

From truth comes authority. Authority is what the Obama Administration has lacked since its inception. The President and his advisors completely misread their political situation when they first moved into the White House. They thought it enabled an ambitious liberal agenda; no crisis should ever go to waste, etc. The truth is that this moment in our history requires shared sacrifice nationally. Everybody has to give up something. Otherwise, it really is the tragedy of the commons.

The Simpson-Bowles plan is a reasonably good first draft for getting after what ails us. Hopefully, the president will make it, or something like it, his own. If he doesn't, then all the Bill Daleys in the world won't be able to fix what will be broken.