Michael Gerson: Easing pain, not problems

BY MICHAEL GERSON Published: January 5, 2013

Two responses to pending crisis

The problem is that demographic realities make current public promises to the middle class, particularly the baby boomer middle class, unsustainable. The number of seniors will roughly double over the next three decades. The average senior takes more than twice as much out of Medicare as he or she pays in. The result is the most predictable, precisely quantifiable economic crisis in American history.

There are only two responses. The conservative approach (which I share) is to change the entitlement system so the federal government does not need to vastly increase taxes. This would involve focusing public benefits on the poor while requiring the wealthy and middle class to accept a greater share of their health costs. The liberal approach is to increase the percentage of the economy taken in taxes well above historical norms to support the commitments of an essentially unreformed entitlement system. But this can't be done without taxing the middle class.

A politically realistic solution would probably involve both approaches — the reorientation of entitlement programs, and broadly increased revenues (achieved in the context of tax reform). The fiscal cliff deal involved neither. Democrats and Republicans are divided on most things. They remain united in their refusal to provoke the middle class with policies that fund sustainable benefits with sufficient taxes.