The Entitlement Hang-Up

By Robert Samuelson

Let’s drop the whole notion of “entitlement.” Just eliminate it. Politicians, pundits and academics who talk about entitlements would then have to name the actual programs and argue their merits and demerits. This would encourage clarity and candor. Of course, that’s why it won’t happen. Generally, Americans don’t want clarity and candor in their fiscal debates. We blame our leaders for budget brawls — this latest was a doozy — but forget that our leaders are largely governed by public opinion, which is awash in contradictions.

So the government is “open” and the immediate threat of default has lifted. Great. But the political stalemate remains. Americans oppose excessive government spending and persistent deficits. Yet, they also support the individual benefit programs (aka “entitlements”), led by Social Security, that drive spending and deficits.

Until the 1980s, entitlement wasn’t part of everyday language. Ronald Reagan was apparently the first president to use the term extensively. He may have “tired of getting beaten up every time he mentioned Social Security, and wanted a broader and more neutral term,” political scientist Norman Ornstein has suggested. Entitlement is a bland label. To say there’s an “entitlement problem” shrewdly avoids connecting it explicitly with popular programs. President Obama evasively speaks of entitlements in this way; so do most Republicans. Their veiled references cover Medicare and Medicaid as well as Social Security.

Two things are wrong with this. First, it’s misleading. Social Security, Medicare (health insurance for the elderly) and Medicaid (health insurance for the poor) aren’t the only big entitlement programs. Here are 12 of the largest in 2012, ranked by the number of recipients, according to the Office of Management and Budget.

(Note: CHIP stands for “children’s health insurance program.” Child nutrition is mostly subsidized school meals. Supplemental Security Income aids the aged, blind and disabled.)

Entitlement Program Recipients, 2012

1. Medicaid/CHIP: 63.2 million

2. Social Security: 55.8 million

3. Medicare: 49.9 million

4. Food Stamps: 46.6 million

5. Child Nutrition: 35 million

6. College Loans: 11.3 million

7. Unemployment Insurance: 8.9 million

8. Supplemental Security Income: 7.9 million

9. Veterans Compensation: 3.8 million

10. Civil Service Retirement: 2.5 million

11. Military Retirement: 2.2 million

12. Farm Subsidies: 1.3 million

There’s overlap. Most Medicare recipients receive Social Security. Some unemployed get food stamps. After eliminating double counting, about half of U.S. households have some federal benefit. Mitt Romney mentioned this last year and was hammered for seeming to disparage recipients. Still, his campaign gaffe illustrates a political dilemma. You can’t easily restrain federal spending without controlling entitlement programs. In 2012, Social Security, Medicare and Medicaid alone represented 44 percent of spending; all entitlement programs were 63 percent. But it’s hard to control entitlement programs because their constituencies are so large.

The second problem is this: Political leaders’ casual references to entitlements encourage people to think benefit programs are legally untouchable, at least in the sense of cuts. People are “entitled.” The trouble is that it’s not true; the popular view of entitlement has little standing in law. In a 1960 decision, Flemming v. Nestor, the Supreme Court ruled that Congress can alter Social Security benefits as it pleases. The court made it clear in later decisions that “the payment of Social Security taxes conveys no contractual rights to Social Security benefits,” says a Congressional Research Service report. Legally, other entitlement programs are similarly vulnerable.

They should be. The budget problem is to match Americans’ appetite for government benefits with a willingness to be taxed. The whole range of government programs and taxes ought to be on the table. By effectively excluding nearly two-thirds of spending — entitlement programs — Congress and the White House increase pressures to cut non-entitlement programs and to raise taxes. We’re squeezing defense and domestic programs (parks, the FBI, the National Institutes of Health, transportation and others) to spare entitlements. The so-called “sequester” mandates across-the-board cuts for these “discretionary” programs.

That’s why we’d be better off ditching the notion of entitlement. It’s outlived its usefulness. Programs shouldn’t be shielded from constructive criticism and change just because they’re hiding behind an obsolete label. Given most programs’ popularity and big constituencies, draconian cuts are unlikely and undesirable.

But huge savings over decades can result from modest shifts in eligibility requirements and benefit levels.

These could be phased in to make them more palatable and less disruptive to the economy.

Our entitlement hang-up has momentous consequences. Too much change is being forced onto too little government. Deadlocks persist because, without Democratic entitlement concessions, Republican tax concessions are implausible. Ideally, the president would seek to change public opinion by confronting its contradictions. But he has done little, leaving the White House and Congress in a state of perpetual warfare. 

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