One reason a serious budget negotiation seems unlikely this fall is that any meaningful assault on the federal deficit would require each party to confront the contradictions between its fiscal agenda and its electoral coalition.
Two long-term trends are creating this tension. One is an electoral reshuffling: Republicans increasingly depend on support from older whites, even as Democrats rely more on the youthful-tilting minority population. The second is the federal budget's shift in focus from children (almost half of whom are now nonwhite) to seniors (about four-fifths of whom remain white). The intersection of these dynamics has left each party advancing budget blueprints that collide with the self-interest of their core supporters.
Heading into budget negotiations, the top priority for many Republicans remains limiting Medicare, Medicaid, and maybe Social Security, the Big Three senior entitlements. The contradiction they face is that the people benefiting from those programs now comprise the core of their electoral coalition.
The GOP presidential nominee has carried most white seniors in four consecutive presidential elections, and by greater margins each time. In 2012, whites over 45 supplied Mitt Romney with nearly three-fifths of his votes, even though they made up about only two-fifths of all voters. Census figures show that children constitute about the same share of the population (just under one-fourth) in House districts represented by Republicans and Democrats. Yet whites 55 and older are nearly 22 percent of the population in Republican-held districts, compared with less than 15 percent in those Democrats control. Even more strikingly, 164 House Republicans represent districts where the share of 55-plus whites exceeds the national average. That's true for only 74 House Democrats.
These older whites deeply resist any changes in Social Security and Medicare, which most consider insurance they have paid for, not a government benefit (although studies show older Americans receive much more in lifetime benefits than they pay in taxes). In United Technologies/National Journal Congressional Connection polling this month, fully four-fifths of whites over 50 opposed any reductions in either Social Security or Medicare. These older white voters are much more passionate about cutting programs that transfer resources to the poor, such as food stamps (three-fifths of older whites would cut the program at least somewhat) and President Obama's health care law.
The GOP's fiscal agenda has partly reflected these priorities. The party continues scorched-earth opposition to Obamacare, and House Republicans recently voted for deep cuts in food stamps (almost half of whose benefits flow toward children). The plan from Rep. Paul Ryan, R-Wis., to convert Medicare into a voucher, or "premium support," system would shelter the staunchest GOP voters by exempting anyone over 55.
But the demands from GOP leaders to squeeze middle-class entitlements such as Medicare in any budget deal still collide with the preferences of both older and blue-collar whites, another key GOP group. That tension, conservative Wall Street Journal columnist Holman Jenkins predicted recently, will steadily drain GOP enthusiasm for retrenching big middle-class entitlements and instead prompt them to frame "fights "¦ between Mr. Obama's "˜unearned' handouts and the "˜earned' handouts of the traditional entitlements." Tempted by that electoral opportunity (which Romney's 2012 campaign previewed), Republicans may be less enthusiastic than they now appear about shrinking entitlements without significant Democratic cover.
Democrats face the opposite dilemma. For decades, they have watched expanding entitlements tilt federal spending toward the elderly. In 1960, children and seniors each consumed around one-fifth of federal domestic spending, the Urban Institute calculates. Today, children receive less than one-third as much as seniors, a trend reinforced by the sequester (which hits discretionary programs like Head Start while largely exempting entitlements). The kids' share of the budget isn't receding for lack of need: Almost half of all K-12 public-school students now come from families that earn little enough to qualify for free or subsidized school lunches, the Southern Education Foundation found recently.
Entering negotiations, many Democrats have made opposition to entitlement cuts a litmus test. But with the senior population projected to double through 2040, rejecting all entitlement reductions ensures both more pressure on discretionary investments like education that help young people and unsustainable tax burdens on future workers. That leaves Democrats confronting their own contradiction: They are now favoring programs that benefit predominantly white seniors who lopsidedly vote against them over policies that benefit the heavily diverse young people who strongly support them. Even a near-term trade of trimming entitlements to restore sequester-starved domestic investment could make sense for Democrats.
The budget isn't a zero-sum struggle between kids and seniors, the brown and the gray. A generationally equitable, growth-promoting deal would expand investment in children, impose reasonable limits on defense, raise taxes to acknowledge that government will cost more in a society with twice as many seniors, and constrain entitlements so that the gray wave doesn't swamp everything else. Neither party, given the demands inside its coalition, can produce such a balanced solution alone. The two sides likely won't acknowledge it anytime soon, but only by linking arms can they rebalance Washington's priorities between investment and consumption — and between the young and the old.