'Entitlement' label must go.
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.)
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.