Friday, March 25, 2005

Social Security and Welfare

Robert Samuelson has a tremendous column in yesterday's Washington Post that makes me want to stand up and cheer. Quite simply, it insists that we call Social Security what it is - welfare.

We are a nation of closet welfare junkies, which helps explain why we can't have an honest debate about Social Security. Social Security and Medicare are our biggest welfare programs, but because Americans regard "welfare" as shameful, we've found other labels for them. We call them "social insurance" or "entitlements." Anything but welfare. Democrats and Republicans alike embrace the deception. No one wants to upset older voters. Well, if you can't call something by its real name, you can't discuss it honestly.

Absolutely. Welfare comes in many forms - corporate, elder, or underemployed - and I oppose all of it wholesale. I particularly like Samuelson's point regarding Social Security as "insurance":

In normal usage, insurance suggests protection against something you don't expect to happen -- a house fire, a car accident. By contrast, most people expect to grow old. Using the "terminology of insurance . . . [was intended] to mask the huge welfare payments being made," ... People falsely believe they're "only getting what they have paid for."

This is a big reason why the dual purposes of Social Security should be separated. The first is a welfare payment to older citizens. The second is a government insurance program to provide for those who are no longer able to work. By covering both with one blanket, we allow the specious argument that the 80% that falls into the first category is a "safety net" lumped together with the 20% who are disabled. There is no good reason to consider these programs together as they have fundamentally different purposes.

Samuelson contends, and I agree, that labeling social security as welfare is important because any other discussion is predicated on the misguided conclusion that baby boomers are just "getting back what they paid in".

Americans regard "earned benefits" and "welfare" differently. The first is a right, the second a privilege. In theory, welfare should serve some public purpose and not just enrich the recipients. By admitting that Social Security and Medicare are welfare, we allow relevant questions to be raised. Do all beneficiaries "need" or "deserve" their welfare? Is the cost "unfair" to taxpayers or burdensome to the economy? Have the social and economic conditions that originally justified the welfare changed?

And, of course, an honest appraisal of those questions lead to one inevitable conclusion:

If these costs are too high (and I think they are), the only way to curb them is to cut benefits. Neither Democrats nor Republicans want to face that reality. President Bush's proposal for "personal accounts" diverts the debate. To enhance their appeal, he promises to exempt anyone 55 or older (anyone born in 1950 or earlier) from any benefit cuts. Some other proposals lower the exemption to 45 (anyone born in 1960 or earlier). Well, that covers most of the baby boom, which stretched from 1946 to 1964. If the real problem is the baby boomers' retirement costs and you exempt baby boomers from benefit cuts, then by definition you ignore the problem.

On these issues, we can't think straight unless we talk straight. We can't control our welfare habit unless we admit our addiction. Don't hold your breath.


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