Both parties avoid the brutal truth about entitlements

Remember when Bill Clinton said "The era of big government is over?" Remember how we laughed and laughed at the thought? That kind of emotion was stirred in me again when Barack Obama pretended to be Ronald Reagan in his mid-term State of the Union speech Tuesday evening.

Even Reagan wasn't really Reagan, come to think of it. He talked about smaller government while presiding over eight years of ever-expanding government. And if Reagan couldn't be Reagan, how silly is the idea of President Obama channeling the Gipper?

As a nation, we are far beyond the point where freezing nondiscretionary spending at current levels means anything significant. The president calls for such a freeze while his 2011 budget contains yet another record deficit. The Congressional Budget Office forecasts a $1.5 trillion shortfall, up half a trillion from its projections in August.

Neither the president nor his Republican responders — Rep. Paul Ryan of Wisconsin with the party's official SOTU retort and Rep. Michele Bachmann with an individual response on behalf of her tea party wing of the GOP — focused on the area where painful, real cuts must be made: health care in general and Medicare in particular.

The president mentioned Medicare in passing, Mr. Ryan and Ms. Bachmann mentioned it not at all. Why not? Because there is nothing to benefit a politician from acknowledging the brute truth that our cherished entitlement programs are unsustainable.

Paul Ryan is 40 years old. He's a numbers guy with a plan, and he looks good on television, like the current occupant of the White House. He chairs the House Budget Committee and has authored a "Roadmap for America's Future," which focuses on navigating our way out of the burden that is the total unfunded liabilities of the federal government.

The Democrats warn that he would deprive younger Americans of their promised Social Security benefits. If you're under 55, you would be out of luck if Mr. Ryan has his way. Actually, math alone means younger Americans are going to be holding the bag at the end of this particular Ponzi scheme.

And they know it. Ask some younger people where you work whether they believe they're going to get government pension checks when they retire. I've found very few who have faith in that promise.

Celebrity economist Nouriel Roubini was at the World Economic Conference in Davos, Switzerland, this week partying with the world's richest movers and shakers, whom he told that Mr. Obama's $400 billion spending freeze proposal was "spare change."

He also said the United States is going to have to raise taxes "for both the rich and the middle class," and is going to have to reform — which means reduce the benefits from — Social Security and other entitlement programs.

The good news is that until then, China has no choice but to keep buying our treasuries, because, says Mr. Roubini, if they stop, their currency will sharply appreciate and their economic growth will be stifled.

No wonder the president favorably mentioned China in his speech. We need them as much as they need us. I remember last year, when a Chinese official was quoted as saying, "We hate you, but there's nothing we can do about it yet."

Michael Barone rightly describes SOTU speeches as "cotton candy," tasty but lacking in nutrition. That is always the case, yet the news media has to make a big deal of them because its job is to cover them.

The reviews of this one were, as they say, mixed. Those prone to swoon over anything Barack Obama says or does were ecstatic after the event. Commentators on the political right were unmoved and highly critical. No surprises there.

The important question is whether the new Congress and this president positioning himself for reelection can somehow contrive to take significant steps back to fiscal sanity. It's a long shot for sure, but if all this talk fizzles and it's business as usual going forward, we will face calamity sooner rather than later.Ron Smith's column appears Fridays in The Baltimore Sun. His e-mail is rsmith@wbal.com.

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