Why Social Security is not like Medicare

Mickey Kaus Columnist
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Solidarity at the ATM: Jacob Sullum on progressives’ counterintuitive opposition to cutting entitlements for the affluent, which is otherwise an obvious bipartisan way out of the current “fiscal cliff” dilemma.  Sullum notes that resistance to this “means-testing” isn’t just a crude matter of maintaining political support for giant transfer programs by making sure richer voters get a share of the loot. There’s also an idealistic underlay:

As William Voegeli observes in his 2005 book Never Enough: America’s Limitless Welfare State, progressives’ counterintuitive resistance to means testing also stems from a communitarian vision that sees universal participation in tax-funded social services as inherently good.

Voegeli quotes Robert Kuttner, co-editor of The American Prospect, who in his 1987 book The Life of the Party argued that “there is immense civic value to treating middle-class and poor people alike.” According to Kuttner, “a common social security program, or medical care program, or public school program” fosters “social solidarity.” [E.A.]

Hmm. I can see where a common medical care program might foster “social solidarity” (which I take to be a slightly gushier version of what I would call “social equality“).  It’s easy to imagine that people who share the same hospitals and waiting rooms, face the same existential threats, and rely on the same (expensive) interventions, would view and treat each other as equals. Same for public schools. But what about the experience of collective check cashing nurtured by Social Security? People usually get their checks in their individual mailboxes and deposit them in their individual bank accounts without ever encountering their fellow recipients. The truly affluent may not really notice the checks at all. There’s precious little that’s social about the experience. And the checks are in differing amounts depending on earnings history (as determined by a formula that tamps down inequality, but nevertheless preserves it). How solidaristic is that?

This suggests–if you buy the egalitarian idealism–that means-testing can safely be applied with some vigor to Social Security.  But it should be deployed a bit more delicately with Medicare–you want a program that treats rich and poor in the same facilities, with the same doctors. You don’t want to make the subsidy to the affluent so negligible that they try to opt out of the program–and then cut its costs by restricting it to the “needy.” ** (Never mind that Obamacare, with its three tiered system, is going in exactly the opposite direction, crudely stratifying patients by income levels.) …

P.S.: It’s not true, though, that means-testing Social Security would turn it into a “welfare” program, since you have to have worked to qualify for Social Security–something that is not the case with true “welfare” programs such as TANF and food stamps (despite various attempts to require work from recipients once they start getting the checks).  I’ve stockpiled a warehouse full of Pinocchios to throw at anyone who makes the “turn it into welfare” argument over the next 6 months. That’ll show them.

P.P.S.: Dems will argue that means-testing Social Security isn’t needed because the programs trust fund isn’t that far out of balance. Which it isn’t. But Medicare is out of balance, or soon will be. If we could save hundreds of billions from Social Security and use those dollars to sustain Medicare, that would be a net plus for “solidarity.”


**–This doesn’t mean you couldn’t means-test Medicare more forcefully than the wimpy CBO proposal of 2008 that Paul Krugman recently chose to sneer at). That plan (see Option 91 on page 166 here) would gradually raise premiums on only the richest 5% of Medicare beneficiaries by eliminating the inflation adjustment of the brackets. Even this mild change would raise between $20 and $30 billion in a decade. But how about rapidly raising the premiums on, say, the top 40% of beneficiaries, with the highest premium rates kicking in at $100,000 instead of $213,000? Everyone, even the rich, would still get some subsidy–the top rate now covers only 80% of costs. You could lower that to 65%. Would high-earners really bail out of Medicare en masse?

This just in:  Rep. Emanuel Cleaver, Chairman of the Congressional Black Caucus, endorses means-testing: “Let’s have some means testing because I don’t think that cutting benefits at this time is going to go over well.” The Hill says Cleaver’s talking about Medicare, but his language seems broader: “We can do means testing and reduce the payments [to the wealthy].” [via NewsAlert] Don’t tell Krugman! … More: In Politico it sounds more like he’s just talking about Medicare. …


“Bloodbath” at Newsweek. A lot of good people now unemployed after boarding the ship of fools HMS Titina. … P.S.: I was terminated by T. Brown as soon as she took over the magazine in early 2011. Reminds me of that old Soviet era joke, the one with the punchline, “The Jews get all the breaks.” …


Mickey Kaus