Mo’ Stake-Raising

Mickey Kaus Columnist
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More Stakes-Raising: Thomas Edsall thinks Mitt Romney’s attacks on “an Entitlement Society” are intended to tar all recipients of entitlement spending–including Social Security pensioners and Medicare patients–with the stigma of “welfare.” Specifically, Edsall argues, Romney would lump these programs in with programs that send cash to the “undeserving” poor–programs like the old AFDC program, widely believed to “perpetuate poverty and discourage work.”  Edsall’s characterization seems a bit unfair.

1) I’m sure Romney wants to get as much mileage as possible by linking the stigma of “welfare” with “entitlements.” He’s on shaky  ground, though. The key distinction is between benefitting people who work  and those who maybe don’t (even though they are able-bodied).  “Welfare” sent cash to single mothers and fathers regardless of whether they made an attempt to enter the labor market to support their families. Now that the old AFDC program has (at least nominally) been reformed to require work, the main remaining big welfare-like program is food stamps, which gives cash-like assistance to the poor without a strong “work test.” A program like Social Security, in contrast, is available only to those who have contributed payroll taxes on the job.  Romney may be hoping the taint of “welfare” can reach from program to program, from Food Stamps to Social Security, but that’s a leap. Social Security’s defenders have always proudly noted that it’s not a welfare program, because you don’t get it if you don’t work.

2) The main thing helping Romney here is that President Obama has not vigorously defended this “work test” for federal aid. In part that’s because in a deep recession all federal payments–welfare and work tested–look like stimulus to a Keynesian. In part it’s because Obama may not really believe in the distinction. Sure, like any smart modern liberal, he sometimes talks about work when he needs to make a sale. But his actions don’t always back  up the talk. His payroll tax cuts, however stimulative, do fuzz up the link between paying the taxes (i.e. working) and collecting Social Security.  A previous generation of New Dealers would have kicked up a fuss about that. Obama doesn’t seem bothered–and, more important, doesn’t even emphasize that, with or without the payroll tax, you still can’t get Social Security unless you work. If Obama really wanted to preserve work-tested programs he’d harp on the work part the way President Clinton did.  We don’t want a “welfare state.” We want benefits for workers. (I’ve tried to call it a “work ethic state.” You got a better phrase?)

3) That said, Romney’s attack on the “entitlement” state doesn’t seem to be simply a restatement of the arguments against welfare.  It’s not as if there aren’t many other possible critiques of “entitlement” programs, even if they aren’t welfare–i.e. only benefit workers. To name some: a) Even work-tested programs like Social Security might be unaffordably expensive; b) Even if affordable they might be too generous, arguably discouraging deserving recipients from going back to work, or letting people stay on government aid for too long–a criticism often made of unemployment compensation; c) They might contain disincentives to work at the margins–for example, the Earned Income Tax Rate is phased out as you go up the income scale, which means that earning an extra dollar costs you some of your benefits; d) They may rely on bureaucratic agencies when competition and choice could deliver the same benefits more efficiently; and e) They may, even if “work-tested,” still generally encourage working Americans to look too much to government for security and too little at their own resources–a “corruption of the American spirit,” Romney says. Call this the Juche (self reliance) argument.

Why isn’t Romney making these arguments? Answer: He obviously is. Edsall short-changes him by slighting the legitimate possible objections to entitlements that don’t have to do with welfare or the taint of the “undeserving” poor.

4) That’s not to say that these other anti-“entitlement” arguments are necessarily winners. The Earned Income Tax Credit, for example, might be worth it even if it imposes a high de facto marginal “tax rate” on some mid-level earners. Social Security could discourage self-reliance–but it can also provide a secure platform from which to take entrepreneurial risks. Medicare’s delivery system, however efficient or inefficient, might provide the security of knowing the government has you covered, that you don’t have to worry about private insurers gaming you or denying you treatments that elected politicians will never be able to deny. I buy all these arguments and disagree with Romney.

5) It’s not clear Romney himself really believes in his arguments, or that (as Edsall suggests) he’ll carry them into the fall campaign. He still has months of work sucking up to the GOP electorate, after all, and attacking “entitlements” is a pretty good way of suggesting he’s more radical than he is without committing himself to much in particular. In the same stump speech cited by Edsall, for example, Romney blasts Obama for failing to  advance a “responsible plan to strengthen existing entitlements.” Strengthen? Existing? This suggests Romney’s opposition to entitlements is less than dogmatic.

6) Romney’s especially weak when he tries to draw a connection between the Entitlement Society and Solyndra-like “crony capitalism.”

President Obama talks about a country where everyone plays by the same rules, but when it comes to his favorite friends, he makes sure the rules don’t apply. He’s given his supporters waivers exempting them from the burden of Obamacare. His NLRB bullies businesses when they don’t bow to union demands. In the energy industry, he’s picked winners – who turned out to be real losers – like Solyndra.

That’s how an entitlement society works – those in government control the resources and make the rules. And while the rest of us stand still, they make sure that their friends get ahead.

The original idea of “entitlements,” of course, was to eliminate favoritism: If you were entitled to something and the government denied it, you could sue them in court and get it. That’s what “entitlement” means. Entitlements succeeded pretty well at ensuring this freedom from bureaucratic whim.  Obama’s waivers are troublesome, but they are troublesome in the way they contradict the entitlement spirit, restoring a huge, easily-abused amount of executive discretion. If I were Romney I might treat the “entitlement problem” and the problem of “crony capitalism” as two distinct maladies afflicting Big Government liberalism. Or come up with a better synthesis than this one.

Mickey Kaus