Opinion: A "Grand Bargain" We Can Believe In? - Optimism Week


By Matthew Cain

Image courtesy of Kevin Burkett.

This week, President Obama signed a continuing resolution that will to keep the government operating until the fall. With the threat of a government shutdown out of the way, maybe now is the time to talk about a truly Grand Bargain.

I’m not talking about a David Brooks-style “Truly Grand Bargain,” where Democrats, fresh off a big electoral win, agree to sell their best ideas down the river just to say they compromised. I’m talking about a big deal made up of things that are both popular and good policy.

If you haven’t been paying attention to our government for the past few years, you might think that it would be an easy sell. After all, members of Congress are elected to represent the will of the people; they’re supposed to work for the good of the nation. Anything that’s popular and good for the country should be a no-brainer.

Don’t assume that with smoke comes a fire.

It’s not that easy. Ideologies (and, often, ignorance) make some of the best ideas nonstarters. And too often, assumptions about “political reality” make the commonsense propositions seem impossible.

But somehow, somewhere, I have hope that this list of proposals could pass. What can I say? I’ve learned to make the best, just like an optimist. Here are some of the most important issues our government will face in the upcoming year.

Lowering the Medicare eligibility age

Medicare is the most efficient and competent healthcare system in the country. For some reason, though, one of the biggest ideas for budget-cutting last year was to raise the Medicare eligibility age.

There were a number of problems arose with this proposal with raising the Medicare eligibility age — primarily that it would both leave seniors out in the cold and not actually not save all that much money. A much better solution would be to lower the Medicare eligibility age so that it covers more people.

Reducing the Medicare age to 55 was a key idea during health care reform fight of 2009, and for good reason. Including (relatively) younger people in the program would help reduce its per-beneficiary costs, because younger people tend to need less care. It would reduce system-wide health spending because Medicare’s size allows it to negotiate lower payment rates than private insurance. And the lower premiums 55-year-olds would pay for Medicare would allow people to save more at the end of their careers as retirement approaches.

You know the story, however. Medicare expansion was cut out of the final health care bill (thanks, Senator Lieberman!), and as deficit hysteria took over, the need for deep cuts became conventional wisdom.

Americans don’t support cutting Medicare, though. Nearly three-fifths of the population said they want Medicare left alone in a December poll; and when expanding Medicare was on the table in 2009, more than 60 percent supported it.

Expanding Social Security

I wrote recently about the plan to cut Social Security benefits, so I’ll spare the details here (except to say that it’s a terrible idea).

A much better idea is to dramatically increase Social Security, maybe even double it.

When the program was designed, more than half of American senior citizens lived out the end of their lives in poverty. But Social Security works — today only about one in six seniors lives in poverty. That’s a huge improvement but there’s still much work to be done.

The average Social Security benefit for a retired worker is a little over $14,000 a year ($1,230 a month). As home prices, savings, and pensions dry up, seniors are relying on Social Security for a larger and larger share of their post-retirement income;. $13,000 per year is barely enough to survive, let alone enjoy the golden years. We should do more, as a people, to protect our seniors.

Plus, Social Security doesn’t just help seniors, it also protects the poor and families who’ve lost a wage-earning parent, like Paul Ryan’s. Still, too many American children go to bed hungry every night. There’s no reason the richest nation on Earth shouldn’t be able to take care of its kids. We should expand Social Security to keep more people out of poverty.

A recent poll showed that more than 80 percent of Americans agreed that protecting Social Security is important, even if it would require raising the payroll tax cap that keeps Social Security taxes low for the wealthiest Americans. To my knowledge, nobody has polled expanding Social Security, but with 80 percent support for raising taxes to maintain its current coverage, there’s no doubt a large number would also support expansion.

Cancel the sequester

This is a no-brainer. The across-the-board automatic cuts indiscriminately hit everything from Head Start early childhood education programs and food stamps to ocean research and weapons development.

It was designed as a bad idea that everyone in Congress would hate enough to avoid, but as the problem got closer, elected officials decided that party orthodoxy was more important than stopping dramatic, and potentially devastating, budget cuts.

In policy terms, the big problem with the sequester is not that it will not only hurt real Americans, stall the recovery, and make future negotiations even more difficult — the real problem is that it doesn’t even do what it was designed to do.

Too often, “budget cuts,” “deficit reduction,” and “debt reduction” are used as synonyms, but they’re not. The sequester cuts budgets, yes, but by eliminating jobs, it also eliminates tax revenue. Federal Reserve Chairman Ben Bernanke told a House Banking Committee that the sequester might actually make it harder to reduce the deficit.

A month ago, Rep. John Conyers (D-Mich.) introduced a one-sentence bill to cancel the sequester , and a few weeks later, Alan Grayson (D-Fla.) delivered more than 300,000 petition signatures to Speaker Boehner’s office, asking for the same.

Raise the minimum wage

Luckily, this one is finally getting some attention. President Obama mentioned it in his State of the Union address,, and several Senators have taken up the mantle since.

As corporate profits skyrocket and median wages stagnate, working people are taking home less and less every year. In fact, the top 1 percent of earners took home 121 percent of all income gains during the first few years of the recovery.

Raising the minimum wage would lift millions of Americans out of poverty, and tying the new wage to inflation would keep us from leaving them behind in the future. But a minimum wage increase isn’t just good for minimum wage workers; it could provide a boost for the whole economy.

When wealthy people make more money — from a tax cut or a bonus — they save their extra earnings. However, this is not the case for working families who would spend any extra dollars they earned thanks to a minimum wage increase. If working folks earned a couple extra dollars a week thanks to a minimum wage increase, they’d spend it. More than likely, they’d spend it at local businesses and restaurants, enabling those businesses to expand and hire more staff; call it “trickle-up economics.”

Not to mention that huge majorities of Americans support raising the minimum wage. Pollsters find it is consistently one of the most popular ideas out there, but somehow objections from the big box stores and fast food chains, which make their profits by paying poverty wages, keep the minimum wage low.

Invest big in infrastructure and research

It seems like it’s only a secret in Washington, but this country is in the middle of a jobs crisis. It makes sense for the government to focus on creating jobs to help right the ship.

Now is the perfect time for huge federal investments in infrastructure, modernization, and scientific research. Not just because there are millions of Americans looking to get back to work, but also because interest rates are so low.

Our government can borrow money at ridiculously low rates. Lower, in fact, than inflation. Real interest rates are negative, which means that investors are literally paying the Federal Reserve to hold their money. Why make costly cuts now, when the government actually makes money from borrowing?

Because conventional wisdom says that’s impossible… even though it’s not.

Climate policy

But how much is it really worth for us to prevent future global devastation, anyway? It’s a complicated question – so complicated that Grist’s David Roberts illustrated his answer with otter pictures. I don’t really have that option (or the space to go into it), so I’ll leave it with this: if we’re not a society of nihilistic sociopaths, it’s worth it.

Climate disruption is already doing considerable damage. We all saw the destruction of this year’s drought and Hurricane Sandy, but that’s not where the climate change’s real impacts will be felt. The developing world, where people are less able to adapt, will face the brunt of climate change, and it’s already starting to happen.

Climate change could be devastating, but it doesn’t have to be. True, it’s too late to stop climate change, but we can stop it from getting worse. There’s hope, but we have to start acting now.

Luckily, huge majorities of Americans favor working on a climate policy — even a majority of those who say they don’t believe the climate crisis is man-made. Our elected officials just have to act.

This is a big list, but there’s hope. People across the country favor these simple measures, we just need the folks we send to Washington to listen.

Is it possible our Congress will stop the partisan bickering and work on an agenda that’s good for everyone? Is it possible that they’ll stop damaging the economy with ideological schemes and start solving problems? Is it possible that the perpetual campaign will end so our elected officials can finally do some governing?

Maybe. But then again, I’m an optimist.