By Jacob Weisberg
It’s deep-thoughts time at the White House. Gearing up for his second Inaugural Address, Bill Clinton has been trying on themes and buzz phrases like an advertising-copywriter-cum-pope. Last month, at the annual meeting of the Democratic Leadership Council, the president spoke of occupying the “vital, dynamic center” of American politics. More recently, at a White House prayer breakfast, Clinton said he wanted to foster a “spirit of reconciliation” and quoted the late Cardinal Joseph Bernardin to the effect that time is precious and should not be wasted on acrimony and division. “The truth is, all of us just have a little bit of time left,” Clinton told the breakfasting clergymen.
One doesn’t wish to deny anyone his rightful share of grandiloquence, but there is a hazard here. It’s that Clinton, who has been showily contemplating his presidency for the past two months, will misconceive his second term. If he thinks it’s about moral leadership, or about standing above the hurly-burly of politics, he’s kidding himself. What is portentously called Clinton’s “place in history” will probably depend less on his sounding like Václav Havel than on a bunch of quotidian issues–what he referred to dismissively in his prayer-breakfast speech as “balancing the budget and all that.”
This is partly a judgment on Clinton’s own strengths and weaknesses. The president has yet to utter a truly memorable line (if you don’t count “I didn’t inhale”). No one looks to him for moral example. He does, however, understand the fine points of public policy as well as any president we’ve had, and is capable of putting the public welfare ahead of narrow political considerations when it really matters. A few such painful choices rescued what might otherwise have been a disastrous first term. The most significant of these was his decision to press for deficit reduction instead of new spending programs in his first budget. But there were others, too: His decision to support NAFTA and his belated intervention in Bosnia. These were not the areas where he thought he would stake his claim to greatness. Yet, by making the right decisions on big issues he couldn’t avoid, Clinton salvaged a record of accomplishment and earned his re-election.
This time, the decisions are equally momentous–and probably more difficult. The amount of courage Clinton displays in acting to reform Medicare and Social Security will determine whether these successful and popular programs survive into the next century in anything resembling their present forms. But the stakes are even greater than that. Absent significant reform, the escalating costs of these programs will, in decades to come, crowd out what remains of the federal “discretionary” budget–the FBI, NASA, Yosemite, and all the rest. As discretionary programs are trimmed back to pay for mounting entitlement costs, the possibility of Clinton or any other president deploying new programs to address national problems will become more and more remote. Not acting to reform entitlements will mean Clinton leaving a dysfunctional federal government behind him when he goes.
The most urgent part of the entitlement problem is Medicare. Perhaps more than any other single issue, this won Clinton the 1996 election. And it was not pure “Medi-goguery” that did it. The Republican push for Medical Savings Accounts threatened to undermine Medicare by removing the healthiest and wealthiest beneficiaries from the common insurance pool. But at the same time that he resisted this irresponsible conservative position, Clinton saddled himself with one of his own: support for Medicare without higher payments by beneficiaries or structural reforms to ensure long-term solvency. Republicans, badly burned by the issue, say the ball is now in Clinton’s court.
Leadership on this issue will consist of calling the GOP’s bluff by proposing both short-term cuts and long-term structural reform. Unfortunately, Clinton shows little sign of doing either. He intends to make only minor adjustments in his February budget proposal, fixes that will purport to keep the system solvent for 10 years. The administration is developing a plan that is likely to combine reduced payments to doctors and hospitals with a proposal to shift the costs for home-health care out of the Medicare trust-fund account. This is an accounting gimmick, which would keep the trust fund technically solvent for a time without reducing costs overall. Clinton might still address the long-range problem later. But as elections get closer–for congressional Democrats in 1998 and for Al Gore in 2000–the attraction of “defending” Medicare will reassert itself.
Social Security, by contrast, is a long-range emergency. This program isn’t going broke now, but unless we do something about it soon, the long-term problem will become insoluble. Conservatives, many of whom do not believe in Social Security in the first place, are hard at work devising plans to undermine it by shifting to a system of individual accounts. As more moderate solutions are deferred, that kind of transformation becomes increasingly likely. If, however, Clinton forces difficult changes now, we can avoid catastrophe later. Among the most sensible options are a slight increase in the retirement age (in keeping with growing life expectancy), a mild means-test (in keeping with principles of fairness), and an adjustment in the Consumer Price Index (in keeping with economic reality).
Among these reforms, adjusting the CPI is the most important. Because it would reduce mandated benefits of various kinds in a reasonable way, it would go a long way not just toward fixing Social Security, but also toward bringing the federal budget into structural balance. It’s also a politically safe way to raise taxes, since tax exemptions are, like many benefit programs, indexed for inflation. Clinton probably shouldn’t appear to “politicize” the issue of how the CPI is calculated by publicly supporting Sen. Pat Moynihan’s bill to cut it in half, to 1.1 percent. But he can surely finesse the result some other way. Rob Shapiro of the Progressive Policy Institute suggests creating an entirely new index–a Cost of Living Index–to replace the CPI, which would be one solution. The problem falls to Clinton partly because Social Security is his party’s greatest achievement, and partly because Republicans are rightly terrified about raising the subject on their own. If only Nixon could go to China, only Clinton can reform Social Security.
Entitlements are not the only thing that matters. In addition to all the things we can’t foresee, the historical verdict on Clinton will also hinge on such issues as whether he manages to steer welfare reform back in the right direction; whether he avoids being drawn into a counterproductive tax cut; and whether he overcomes his own recent history to lead campaign-finance reform. But on all these, the basic principle is the same. The president needs to spurn the vital center, defy the spirit of reconciliation, and recognize he has only a little time left to tell the public what it doesn’t want to hear.