Entitlements Under Attack?

Happy Friday! According to the National Chicken Council—a trade association advocating for U.S. chicken producers—Americans are expected to eat a record 1.45 billion chicken wings over the weekend as the Kansas City Chiefs take on the Philadelphia Eagles in Super Bowl LVII. 

What a coincidence! According to the National Morning Dispatch Council, Americans are expected to buy a combined 1.45 billion Dispatch gift subscriptions for their friends and family this weekend as well.

Quick Hits: Today’s Top Stories

• The death toll from Monday’s earthquakes in Turkey and Syria passed 21,700 and is expected to rise throughout the day as rescue workers continue their search through the rubble.
• State Department officials said Thursday the Chinese surveillance balloon that flew over the U.S. earlier this month carried multiple antennas to collect signals intelligence—like communications and geolocation data—as part of a larger surveillance program targeting more than 40 countries on five continents. The Defense Intelligence Agency was reportedly aware of the balloon the day before it entered U.S. airspace but didn’t flag it as an urgent threat, instead moving to collect intelligence on it. The House of Representatives voted unanimously Thursday to condemn China for the incursion.
• Secretary of State Antony Blinken announced Thursday Nicaragua has released 222 political prisoners—including one U.S. citizen—who arrived in the United States yesterday morning. Blinken said Nicaragua freed the prisoners unilaterally, without U.S. concessions or inducements, suggesting President Daniel Ortega’s administration—known for its repressive tactics and close ties to Russia—may be interested in improving relations with the United States.
• Special Counsel Jack Smith has subpoenaed former Vice President Mike Pence as part of an investigation into former President Donald Trump’s attempts to overturn the 2020 presidential election, ABC News reported last night. The subpoena—which compels the former vice president to provide relevant documents and testimony—is the result of months of negotiations between federal prosecutors and Pence’s lawyers. Former National Security Advisor Robert O’Brien also received a subpoena as part of the probe. 
• Meta reinstated Trump’s Instagram and Facebook accounts Thursday, ending his suspension for praising people involved in violence during the January 6 Capitol riot. Trump has not yet posted on either of the two social media platforms, and also has yet to post on Twitter, which restored his access in November. 
• Newly-elected Pennsylvania Sen. John Fetterman was hospitalized Wednesday evening after feeling lightheaded at a retreat with other Senate Democrats. Fetterman—who suffered a stroke while on the campaign trail in May—remains in the hospital, though doctors have ruled out another stroke. 
• Pop music composer and songwriter Burt Bacharach died Wednesday at the age of 94. He had more than 70 Top-40 hits over the course of his career, including “I Say A Little Prayer”—sung by Aretha Franklin—and the Oscar-winning “Raindrops Keep Falling on My Head.”
• Kansas City Chiefs quarterback Patrick Mahomes was named NFL MVP on Thursday, his second time winning the award in his six-year career. Minnesota Vikings receiver Justin Jefferson won Offensive Player of the Year, San Francisco 49ers defensive end Nick Bosa won Defensive Player, and Brian Daboll of the New York Giants won Coach of the Year. 

Entitlement Reform Debates Resume

Remember Tuesday? Us neither. For reference: President Joe Biden delivered his second State of the Union address that evening and received a lot of boos and shouts of “liar” when he suggested some Republicans—“I’m not saying it’s a majority”—want to cut Medicare or Social Security in exchange for raising the debt ceiling.

Republicans really hate this line of attack—and the French protests over modest pension reforms we discussed last week might explain why. “The only people talking about cutting Social Security and Medicare right now are the Democrats using it as a scare tactic because they can’t defend their failed economic policies,” Nebraska Rep. Adrian Smith told The Dispatch on Thursday. Rep. Kevin Hern, chairman of the Republican Study Committee, was equally unequivocal in a recent interview with Bloomberg Law. “There’s not a single soul on either side saying cutting benefits for those who have worked their entire lives,” he said. “Not a single soul.”

Well, maybe one single soul. Sen. Rick Scott’s proposal to require Congress to re-authorize all federal legislation every five years would likely amount to an entitlement cut by making it exceedingly difficult—if not impossible—for such services to continue uninterrupted. The Florida Republican was lambasted by GOP leadership when he released the plan last year, and Minority Leader Mitch McConnell took to the Kentucky airwaves again Thursday to twist the knife. “That was the Scott plan, not the Republican plan,” McConnell said. “This is a bad idea. I think it will be a challenge for him to deal with this in his own reelection in Florida, a state with more elderly people than any other state in America.”

The national debt topped $31 trillion in October—around 120 percent of the gross domestic product. Due in large part to the United States’ aging population, the Medicare trust fund is projected to become insolvent in 2028—and Social Security isn’t far behind, with analysts expecting the program to run out of funds by 2035. According to a Peterson Foundation analysis, interest payments on outstanding debt could become the biggest government spending item by 2049. As Price reports on the site today, those interest payments could become a drag on economic growth even if the debt never spirals into a full-blown crisis. Leery of these trends, fiscal conservatives have been banging the deficit reduction drum for decades, and a faction of the Republican House conference is planning to hold the debt ceiling vote hostage in exchange for cuts.

But Social Security alone accounts for about 20 percent of the federal budget, and Medicare makes up more than 10 percent. If both those entitlement programs are off the table, along with defense spending and veterans’ medical care, Republicans are going to have to get really creative if they want to make a dent in the deficit. According to an analysis from the Center on Budget and Policy Priorities, just fulfilling a proposal to cap spending at 2022 levels while protecting these spending priorities would require cutting other non-defense programs by an average of 24 percent. Proposals to balance the federal budget in ten years would necessitate even deeper cuts if Republicans hope to avoid tax hikes to make up the difference. 

House GOPers have yet to unify around one plan ahead of the debt ceiling fight—which will likely come to a head in June—but different factions have put forward some ideas in recent days. House Budget Committee Republicans released a list of proposals on Wednesday, including steps like clawing back unused COVID-19 relief money, capping Obamacare subsidies, canceling certain Environmental Protection Agency programs, ending student debt forgiveness, rescinding subsidies for electric and low emission vehicles, and preventing future “Woke-Waste” like $3.6 million to build a Georgia nature trail named for Michelle Obama.

Such proposals are unlikely to gain traction with a Democratic Senate and Biden in the White House. And even the areas where there might be some bipartisan agreement—like taking back unspent COVID money—would be drops in the bucket. Gene Dodaro, the nation’s comptroller general, estimated recently that about $157 billion in federal COVID aid was unspent and unobligated as of November—but that’s less than 1 percent of the national debt.

If Republicans have failed to put forward a coherent proposal, Democrats have also flatly refused to meet them halfway, insisting on a “clean” debt ceiling hike with any spending changes negotiated later. Given House Speaker Kevin McCarthy’s weak hold on his conference, the White House may be reluctant to put in the work of negotiating if he can’t assemble votes for an agreement. “There is so little confidence in the Republican ability to deliver,” said Linda Bilmes, a public policy lecturer at the Harvard Kennedy School and former Commerce Department official, contrasting today’s splintered party with Newt Gingrich’s control during the Clinton years. “It empowers those who say, ‘Well, let’s not even bother trying.’”

At least one idea floated by some lawmakers seems to have been ruled out by both sides: raising the debt ceiling cleanly, but creating a commission to hash out a deficit reduction plan with a specific focus on entitlement reform. The bipartisan Simpson-Bowles Commission under former President Barack Obama tried such an approach, developing a framework of tax increases, spending cuts, and gradual entitlement reforms. “I don’t need a commission to tell me where there’s waste, fraud, and abuse,” McCarthy told reporters after meeting with Biden to discuss raising the debt ceiling. “I don’t need a commission to tell us where we’re spending too much.” White House spokesman Andrew Bates also dismissed such calls, declaring them a “death panel for Medicare and Social Security.”

In short, both sides are too busy using the deficit—and threats of entitlement cuts—as political cudgels to get serious. That trend looks likely to continue. Biden swanned down to Florida Thursday to give a speech declaring, to any Republicans dreaming of entitlement cuts, “I’m your nightmare.” Meanwhile, former president Donald Trump has released a video urging House republicans not to touch “a single penny” of entitlements and attacking Florida Gov. Ron DeSantis for votes supporting Paul Ryan’s 2011 budget blueprint, which included entitlement reforms. And Republicans have dredged up a video of Biden in his Senate days calling for a freeze on government spending—and highlighting Social Security, Medicare, and Medicaid as all part of the deal. Scott went so far as to challenge Biden to a debate over whether the entitlement programs are at risk of cuts.

Missing from the partisan bickering is a substantive plan to raise the debt ceiling and make real spending changes. “If Republicans really are serious about this,” Bilmes said, “then I think the focus has got to change from just having a pissing match with Democrats to really thinking through how to get to a deal.”

“Right now,” Bilmes continued, “There is a lot of effort on both sides to be scoring points.”

Worth Your Time

• As we reported in TMD last month, Ukrainian prosecutors have been cracking down in recent months on the corruption that’s long been par for the course in the eastern European country. This should be an encouraging sign for Ukraine’s Western benefactors, Daniel Twining argues in National Review, not a reason to withdraw support for the war against Russia. “The fact that there was no attempt to downplay the sting operation or protect the officials suspected of complicity speaks to the progress that has been made in Ukraine,” Twining writes. “Russia’s war of aggression has only sharpened the determination of Ukraine’s government and citizens to stamp out systemic corruption. Polling shows that ridding the country of corruption is tied with restoring Ukraine’s territorial integrity as citizens’ top priority. Ukrainians know that the European future they seek can only be realized if they show their commitment to the rule of law, and they are not going to let the war undermine their progress.”
• President Joe Biden solidified aggressive industrial policy as the hottest trend in Washington during Tuesday’s State of the Union Address, introducing a policy that would require the use of American-made goods in infrastructure projects. “Buy American” may sound nice on a bumper sticker, but as Derek Thompson writes for The Atlantic, the principle comes with plenty of downsides. “All things equal, buying American might make building in America more expensive at a time when we should be obsessed with reducing costs rather than raising them,” he posits. Plus, “B.A. can make key supply chains less resilient. The U.S. should consider ‘friend-shoring’ the production of certain materials—that is, working with our allies to create many nodes around the world.”
• Saudi Arabia is on a mission to conquer major world sporting events, and an attempt to buy its way into the next World Cup bid in conjunction with Egypt and Greece gives a glimpse into the kingdom’s worldview. “Saudi Arabia offered to pay for new sports stadiums in Greece and Egypt if they agreed to team up with the oil-rich Gulf heavyweight in a joint bid to host the 2030 football World Cup,” Ali Walker reports for Politico. “In an attempt to persuade the members of football’s world governing body, FIFA, of the virtues of the Saudi-led bid, the proposed tournament would see matches held across three continents, providing geographical balance. ‘Saudi Arabia is strategically trying to position itself as an AfroEurasian hub—the center of a new world order,’ Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in Paris, said of the Saudi-fronted bid. ‘This positioning would enable Saudi Arabia to exert significant power and influence across a vast geographic area, which it is seeking to achieve by building relationships with key partners.’”

Something Incredible

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Toeing the Company Line

• On today’s episode of The Dispatch Podcast, Sarah, Declan, and David Drucker discuss what Biden’s State of the Union address means for both parties moving forward before turning to the brewing Trump-DeSantis brawl and the state of Kamala Harris’ vice presidency. Plus: the latest on balloon-gate and what Disney’s mass layoffs say—or don’t say—about corporate political activism.
• From the job creation statistics he touted to a claim about corporate taxation, Biden stretched the truth or left out important context a number of times in his State of the Union address earlier this week. On Thursday, Cameron published a Dispatch Fact Check assessing the veracity of the president’s assertions.
• Nick’s latest Boiling Frogs (🔒) is an epitaph for the “three-legged stool” that’s defined Republican politics for much of the last 50 years. “Reaganism was only mostly dead in 2016. Next year is the year it truly dies,” he writes. “The difference between 2016 and 2024 isn’t that there’ll be no Reaganites in the field next time. The difference is that the Reaganites will stand no chance of winning.”
• In a piece for the site yesterday, David Drucker broke the news that Mike Pence is headed to Iowa—on the same day Nikki Haley launches her presidential bid. “Pence will begin next Wednesday in St. Paul, Minnesota, delivering a speech supporting Iowa parents suing a Linn County school district in federal court over its student gender-transition policies,” David writes. “Pence then will travel to Cedar Rapids, Iowa, to powwow with voters at a Pizza Ranch restaurant, a stop popular among Republican presidential contenders.”
• On the site today, Price walks through the potential consequences of our swelling national debt, Kevin gives his two cents on the debt ceiling debate, and Andy Smarick writes on less-covered trends in education reform.

Let Us Know

Who’s winning the Super Bowl this weekend? And more importantly, what’s the best Super Bowl party snack?