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Watch what you call welfare.

Mickey Kaus, an editor of >;The Washington Monthly from 1978 to 1981, is a senior editor of

The New Republic

In 1972, when the Monthly first proposed cutting the Social Security benefits of the affluent, it was a satisfyingly reckless proposal. Today, this idea-"means-testing"-is alarmingly respectable. Wall Street types like Pete Peterson and Donald Regan endorse it as a deficit-buster. Bruce Babbitt injected it briefly into the 1988 campaign . In Washington it has started to bubble up in conversations with congressional Democr >;ats.

Those conversations are off-the-record, at least for now. In public, Responsible Policymakers declare that benefits should be fully taxed but that checks going to the well-to-do should not actually be cut. That compromise would preserve the fictional analogy of Social Security with private insurance (private insurance benefits are already taxed). But we can expect even this fig leaf to be blown away in the next budgetary storm. You can raise a lot more money by eliminating benefits than by merel >;y taxing them. In order to finance the current policy of full-benefits-for-the-rich, we must impose a roll tax of 15.3 percent on the non-retired. Americans have more pressing uses for 15.3 percent of their wages than subsidizing the summer vacations of the Annenbergs.

My purpose isn't to congratulate the Monthly for its prescience, because the Monthly's "gospel" has changed as dramatically as the establishment's. Originally, the magazine's means-test heresy was part of its endorsement of Milton Fried >;man's idea of a guaranteed income ("Abolish Social

Security," January 1972). Friedman's goal was to eliminate virtually all government benefit programs-not just Social Security but also Aid to Families with Dependent Children (welfare), unemployment compensation, public housing, Medicaid, and farm subsidies-and replace them with one, big means-tested program that gave money to anyone who, for whatever reason, didn't have enough.

The virtue of Friedman's plan was its simplicity. There would be no crazy-qu >;ilt of competing entitlements, no doubledipping, no bureaucratic turf fights, no nosy moralistic social workers asking welfare mothers whether anybody in the house could be working. Wasn't the point of welfare-like Social Security, unemployment compensation and the rest-really just to get checks to people who needed money? Yes, a reed the Month When President Nixon actually proposed a variant of the guaranteed income, the Monthly's Taylor Branch called its defeat a "tragedy."

Today's Monthly doctrine has >; been considerably modified. Charles Peters now, sensibly, calls for a "work requirement" for anyone getting government checks"Those under 65 should be required to accept any job they can perform. Welfare mothers with infant children should be given work that can be done at home." So much for Friedman's and Nixon's guaranteed income, the essence of which, as Branch "defined away all the moral questions about whether a person should work by looking strictly at income."

Yet while Peters has abandoned the >;amorality of the Friedman and Nixon plans, he clings to the idea of One Big Means-Tested Program. In the latest update of the Monthly gospel (Peters's book, Tilting at Windmills) he writes, "The answer is to consolidate all income maintenance programs-Social Security, unemployment compensation, veterans' pensions, welfare, workers' compensation-into one program that will insure each of us against need." Bandits

I hate to be the sort who attacks Peters's, or anyone's political ideas as too simple.

That's >; usually the tactic of people who don't have the guts to change the status quo. (Ask

Mario Cuomo for his welfare plan and he'll chastise you for expecting him to be able to talk about such a complex subject in a few sentences. This is the surest indication that he has no plan at all.) But the Peters proposal is too simple. It lumps together groups that should be clearly separated.

First, Peters tries to cover, in a single program, the poor who are not expected to work (such as those over 65) along wit >;h those who are expected to work (such as welfare mothers). The former would get government checks; the latter would get checks but be "required" to take jobs. Presumably if a welfare mother, for example, refused to work she would lose her benefits. This sounds fine in theory, and indeed, work "requirements" are a key feature of current welfare reform efforts. In practice, they don't work very well. Political common sense tells you it's very hard for the government to take away benefits people already >;have. Experience with welfare reform so far confirms this fear,

Better not to give people the cash in the first place. Have two separate programs: one that sends checks to seniors and others not expected to work; another that offers a guaranteed job, but not a check, to the able-bodied, including welfare mothers. If a welfare mother refused the job, she would be on her own. N "requirements." No bureaucrati "sanctions." Simple, even.

Peters also lumps together in his One Big Program two groups of pe >;ople over 65: those who have worked during their working lives and those who haven't. The distinction isn't trivial. If the government expects the able-bodied to work, it makes sense to treat those who have fulfilled this expectation more generously than those who haven't. In fact, the government does this now. We already have a guaranteed-income program for seniors-not Social Security, but a Nixon-era program called SSI (Supplemental Security Income). Anyone over a certain age can get SSI whether they >;'ve worked a day in their life or not, and that's as it should be. (The main problem with

SSI is that the benefits for single elderly men and women are scandalously low-about $400 a month in many states.)

Social Security is supposed to be different-a more generous program for retirees who have worked (and paid Social Security contributions) for a minimum number of quarters. That's as it should be too. The problem with Social Security isn't that it gives ex-workers something extra. The problem is that

>;today's ex-workers have neglected to pay for all the extra they are getting. As a result the program is generationally unfair. Current recipients are making out like bandits, getting back many times what they paid in. Meanwhile, today's younger workers will be lucky to get out of the system even as much as they are paying in. But we can cure this generational problem, and save the system from bankruptcy, by cutting the benefits of the affluent (means-testing).

Once we've done that, there's no reason >;not to keep Social Security as a separate pension program for ex-workers. There are, in fact, perfectly good justifications for a very generous middle-class Social Security system, if we are willing to pay for it. Socialized pensions are more efficient than private pensions because they save advertising and sales costs. They contain a defensible element of paternalism, protecting the elderly who might not save their money or who might blow their IRAs by investing them in pork rind futures. It's wrong to >; think all government programs should give money only to the poorest.

Ultimately, by treating Social Security as just another "relief" scheme to be rolled into the One Big Plan, the Monthly joins company with the most cynical opponents of means-testing--status-quo liberals who say that if benefits didn't go to rich and poor alike it would "make Social Security a welfare program." No it wouldn't. Social Security isn't welfare and will never be welfare because, unlike either AFDC or SSI, it pays benefits >;only to those who have worked-which is precisely why it can be safely means-tested without making recipients feel as if they are on the dole. When Charles Peters glosses over the "have worked/haven't worked" distinction, he gives ammunition to the opponents of the very reform-means-testing-he's finally pushed to the brink of respectability.
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Author:Kaus, Mickey
Publication:Washington Monthly
Date:Mar 1, 1989
Previous Article:I've tilted at windmills, and the windmills won.
Next Article:Neoliberals in the wilderness.

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