White House Budget Director Affirms Governor Palin's Assertion--President Obama Can't Prioritize Spending

Last week, Governor Palin appeared on Hannity in part to discuss the current debt ceiling debate. Governor Palin referenced President Obama’s comments earlier in the week where he said he was not sure that the federal government could pay Social Security benefits if the debt ceiling was not raised. She said:

We have the $200 billion coming into the federal government every month. It takes $35 billion --- I'm sorry, billion dollars -- we have $35 billion that we must use to service the debt, $50 billion that we must use to write those Social Security checks, $2.9 billion to pay for our military personnel, and then other essentials.

You prioritize. Our president essentially suggested the other day that he's not able to prioritize. As the chief executive of our nation, he cannot prioritize, and that's why he suggested that Social Security checks may not be written come August 2nd if that debt ceiling isn't increased.

No. You pay for the essentials first and then the non-essentials have to get cut. They have to wait.

Today, Obama administration budget director, Jacob Lew, appearing on CNN’s State of the Union, affirmed Governor Palin’s assertion that the Obama administration is incapable of prioritizing spending. To CNN’s Candy Crowley’s credit, she pushed Lew on this issue of prioritization of funds in the situation that the debt ceiling is not raised, and Lew did not provide an answer:

CNN's Candy Crowley, HOST: "More immediately, you'd have to make some spending priorities -- payment priority decisions: Social Security benefits, and federal worker pay, and defense contractors. What are your priorities should the debt ceiling not be raised on the 2nd, when you have the bills that immediately come due? Social Security checks, federal worker pay, defense contractors?"

Jacob Lew, WH Budget Director: "Our plan is for Congress to do its work and the President to sign into law legislation that will make it possible for the United States as it always has, to keep its obligations. We'll be ready to deal with whatever happens. There is no plan other than meeting our obligations."

CROWLEY: "Surely you must have discussed priorities, though, we have to pay this?"

LEW: "The truth is this is a different situation the United States has ever faced. We've never gone into a situation where we didn't have enough money to pay our bills. We borrow 40 cents on a dollar right now. And if the time comes when we lose the ability to pay our bills, there will be a cash flow issue that is very real, and that's why it's critical that Congress take action before August 2nd."

CROWLEY: "Would you allow it to happen that those the Social Security checks would not go out? Would you allow that to happen?"

LEW: "As the President has indicated, it's not a question of what we allow and what we don't allow --"

CROWLEY: "But you get to decide priorities. There will be some money --"

LEW: "There will not be enough money to pay all the bills."

CROWLEY: "Of course not, that's why I'm talking about priorities."

LEW: "I think that once someone gets into the business of trying to ask about setting priorities it misses the question. Which is that it's unacceptable for the United States to be in a place whether it's Social Security recipients, or a soldier or somebody who is just owed money by the government can't be paid because we have not done our job."

The Obama administration has no reason to avoid the question, nor be unwilling to prioritize funding. The CATO Institute had a great piece up last week discussing the debt ceiling in which they re-emphasize Governor Palin’s point-- the debt ceiling does not need to be raised when spending is prioritized and proper cuts are made. In fact, according to the CATO Institute, if our federal government was willing to cut spending back to 2003 levels, the roughly $200 billion in tax revenues would be more than sufficient to cover Social Security, Medicare, military pay, and servicing the interest on the debt. Obviously, there is no need for Social Security and Medicare recipients, folks who have had money deducted from their checks for decades to go towards these programs, to not receive their payments, nor is there any need for soldiers, who defend our freedoms, to not receive their pay, regardless of what happens to the debt ceiling.

When Governor Palin speaks of prioritizing spending, she’s not playing the role of armchair executive. Governor Palin has prioritized spending and made cuts, even in times of surplus. Her prudent budgeting has been well documented, as she cut the Alaska budget 9.5% during her time as Governor. She vetoed hundreds of millions of dollars in unneeded spending, rejected stimulus funding that would not be effective in Alaska’s climate, and removed duplicated federal/state funding from her budgets. At the same time, Governor Palin’s tenure included implementing a Senior Benefits program for low income elders. She also increased funding for students with disabilities in rural schools and increased funding for special needs education. Overall, she increased special needs funding by 175%. The very things that Governor Palin called for are the very things that she has done during her political career. She prioritized and budgeted accordingly—cutting unneeded spending and providing funding for people who needed it most. How much more are such prioritizations and cuts needed in harder economic times?

Crossposted here, here, and here.

Governor Palin on the Issues: Entitlements Programs

“I think if you want to expand your base, you have to get into policy even though it sounds dull.”
-Charles Krauthammer in regards to Governor Palin's 2012 Presidential potential (see beginning at the 2:18 mark of the following video)

This is the second in a series of posts outlining Governor Palin's stance on policy issues, and this one is dedicated to Charles Krauthammer who apparently hasn't been paying very close attention. Prepare to be bored! You can see the first "On the Issues" post on monetary policy here. This second post will address Governor Palin's stance on entitlement programs.

Governor Palin has recently emphasized the need to reform entitlements. In a recent interview with Time Magazine, she emphasized the need to address entitlements as a means to get America's fiscal house in order:

I'd also look for entitlement reform, as well as a system-wide audit of government spending with a goal to move us toward zero-based budgeting practices and ultimately a balanced budget. We need to start really living within our means. As any mother or father will tell you, you don't spend what you don't have. And if the argument against this is that the government is too big and unruly to even consider such an audit, then I say that that alone is all the proof you need that our government has grown completely out of control and desperately needs to be reined in.

She also expressed strong support for Congressman Ryan's "Roadmap for America" juxtaposed against President Obama's Debt Commission findings in a Wall Street Journal op-ed last week. She discusses Ryan's solutions for Social Security and Medicare:

In my view, a better plan is the Roadmap for America's Future produced by Rep. Paul Ryan (R., Wisc.). The Roadmap offers a reliable path to long-term solvency for our entitlement programs, and it does so by encouraging personal responsibility and independence.

[...]

On Social Security, as with Medicare, the Roadmap honors our commitments to those who are already receiving benefits by guaranteeing all existing rights to people over the age of 55. Those below that age are offered a choice: They can remain in the traditional government-run system or direct a portion of their payroll taxes to personal accounts, owned by them, managed by the Social Security Administration and guaranteed by the federal government. Under the Roadmap's proposals, they can pass these savings onto their heirs. The current Medicaid system, the majority of which is paid for by the federal government but administered by the states, would be replaced by a block-grant system that would reward economizing states.

Together these reforms help to secure our entitlement programs for the 21st century. According to the Congressional Budget Office (CBO), the Roadmap would lead to lower deficits and a much lower federal debt. The CBO estimates that under current spending plans, our federal debt would rise to 87% of GDP by 2020, to 223% by 2040, and to 433% by 2060. Under Rep. Ryan's Roadmap, the CBO estimates that debt would rise much more slowly, peaking at 99% in 2040 and then dropping back to 77% by 2060.

In supporting Congressman Ryan's plan, Governor Palin advocates for reforms in Medicare and Social Security that give individuals greater control over their own money, as working Americans pay social security and medicare taxes, by giving them the option manage their own personal accounts. Governor Palin advocated another means of Medicare reform in the Fall of 2009 during health care reform discussions (emphasis mine):

Instead of poll-driven "solutions," let's talk about real health-care reform: market-oriented, patient-centered, and result-driven. As the Cato Institute's Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each year in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines. Rather than another top-down government plan, let's give Americans control over their own health care.

This reform would give patients greater flexibility and would save American taxpayers money. Michael Cannon, whom Governor Palin referenced, said this regarding Medicare vouchers:

"Vouchers would not make seniors less secure, it would make them more secure," Cannon told ABC News. "Everyone agrees that Medicare cannot go on spending as much money as it does now. The voucher idea allows individual consumers to make their own decisions about what they need and what they don't need."

"Giving Medicare seniors a voucher is the most rational, the most humane way to contain Medicare spending," he added.

She also advocates a plan for Medicaid which incentivizes states to budget more frugally and efficiently as suggested in Ryan's plan . What effects would these reforms have? They would "lead to lower deficits and much lower federal debt". Governor Palin often refers to deficit, out -of-control spending and massive debt as generational theft. Borrowing from future in order to pay for today's entitlement is indeed stealing from our kids and grandkids. It's also the ultimate display of taxation without representation, as future Americans will be paying for past entitlements without having representation to approve this spending.

Governor Palin not only has opinions on entitlement policy; she also has a strong record on dealing efficiently with Medicaid on a state level. Medicaid is a program funded and managed on both a state and federal level. Due to federal restrictions, assessments to see if elderly patients qualified for Medicaid funded home health care assistance had to be taken over by the state as no other contractors could bid. The federal government stopped accepting new patients due to the backlog of individuals to be assessed for assistance. By FY2009, Governor Palin's administration had reduced the backlog of assessments from 30.5% in her predecessor's FY2005 and 4.5% in FY2008 during her administration.

The FY2011 budget is still being discussed in the Senate, but the FY2010 budget included $1.9 trillion dollars in non-discretionary (Medicare, Medicaid, and Social Security) spending, which is equivalent to 55% of the federal budget. Through their taxes, people have paid into Medicare and Social Security over time. It is smart, as Congressman Ryan and Governor Palin have suggested, to allow for greater personal responsibility and flexibility for these programs. Additionally, these reforms would help decrease the national debt to help secure America's future and solvency.

I hope this was dull enough for you, Mr.Krauthammer.

Update: I neglected to previously include that Governor Palin strongly encouraged incoming members of Congress to address entitlement reform in a Facebook post last month:

In order to avert a fiscal disaster, we will also need to check the growth of spending on our entitlement programs. That will be a huge challenge, but it must be confronted head on. We must do it in a humane way that honors the government’s current commitments to our fellow Americans while also keeping faith with future generations. We cannot rob from our children and grandchildren’s tomorrow to pay for our unchecked spending today.

Crossposted here and here.