Friday, August 26, 2011

AUG 25, 2011 14:41 EDT
Mark Miller

“It’s a beautiful thing, the destruction of words,” wrote George Orwell in 1984. And so it is with a mangled word that is central to the 2012 presidential race and the work of the Congressional deficit-cutting Super Committee: entitlement.

In the context of federal programs such as Social Security and Medicare, the word entitlement refers to a benefit you are granted by law. You are entitled to the benefit not because it is welfare, but because it is a program you have paid into over time. You can count on it because it is insurance that isn’t subject to the judgment of a case worker or the spending priorities of budgetmakers.

This original – and accurate – meaning has been under attack ever since the days of the Reagan Revolution. One of the first shots was fired by David Stockman, the Reagan Administration budget director who famously called Social Security closet socialism and a “coast-to-coast soup line.” Stockman’s comment preceded Ronald Reagan’s proposal to slash Social Security benefits in 1981, a political debacle that ultimately led to the compromise reforms of the bi-partisan Greenspan Commission in 1983.

But the word entitlement has been under sustained and successful assault ever since, with the result that most Americans now understand it as a four-letter pejorative term connoting welfare—handouts for people who don’t pull their own weight. It’s used that that way by all Republicans, many Democrats and nearly all Beltway media.

Do entitlements play a role in our national debt problem? Yes and no.

Social Security doesn’t contribute directly to the deficit. The Social Security Trust Fund (SSTF) runs an enormous surplus – and despite what you hear, the program is cash flow positive if you include interest on SSTF bonds and income taxes paid on benefits by high-income recipients. Social Security does face a long-term imbalance around the year 2035, when the SSTF will be exhausted, but that problem can be remedied easily by eliminating the cap on income subject to payroll taxes (See: Warren Buffett.)

Social Security adds pressure on the deficit only in the sense that the SSTF surplus is invested in a special form of Treasury note that is owed back to the fund. But that obligation is no different than any other Treasury debt.

Rapidly escalating healthcare costs are a major driver of the deficit, but Medicare reflects that inflation; it isn’t a direct cause of it. What’s more, Medicare delivers far more healthcare for the buck than private insurance; the notion that we can cut costs through privatization just doesn’t hold water.

When pollsters ask the public about Social Security and Medicare, the response is clear: keep both programs intact. These responses are consistent across party lines and age groups. For example, a survey by progressive pollster Celinda Lake for the National Committee to Protect Social Security and Medicare shows that Americans overwhelmingly reject the suggestion that Social Security contributes to the national deficit, or that benefits should be cut to reduce the debt.

But ask the public about entitlements, and the response is different. “Americans are less group-oriented and more individually oriented,” says Lake. “And entitlement sounds like something that is given to a group. When you describe this as an ‘earned benefit or a guaranteed benefit that you paid into,’ that sounds like something that is individualistic.”

One of the ironies here is that the architects of Social Security and Medicare took great pains to distinguish the programs from welfare. Instead, they were designed to be social insurance programs, which pool risk broadly. In the case of Social Security, you pay for protection while you’re working, so that you and your family will be protected when you can’t work.

The Orwellian destruction of entitlement exploits public ignorance of this excellent concept.

“In areas where people people are unfamiliar with a concept, the best way to reach them is through analogy,” says Drew Westen, a professor of psychology and psychiatry at Emory University and author of The Political Brain: The Role of Emotion in Deciding the Fate of the Nation.

“An analogy moves you from a domain you don’t know to a domain you do understand. If the analogy for Medicare is entitlement, that makes people think of a handout. If the analogy is insurance that you pay for with your taxes, not only are you mapping to a domain people consider completely legitimate and appropriate, but you are reminding them that their taxes are going for something that is useful to them.”

Social Security and Medicare aren’t just useful – they’re essential pillars holding up the rickety roof of retirement security. Now, both will be subject to the work of the Super Committee, which will be dominated by Republicans and so-called centrist Democrats who could very well send entitlement cuts to the full Congress for an up or down vote. On the campaign trail, Republicans unanimously declare their readiness to cut entitlements, and President Obama seems ready to go along.

But here’s the good news: Orwell’s Newspeak aimed to supplant the English language entirely by the year 2050. So, there’s still plenty of time to stop the destruction of entitlements before it’s too late.

Entitlement – something you are owed or due. A more exact definition may be: the fact of having a right to something. The ‘something’ may well be very vague and varies at a given time to place, and even in purpose.

Set the entitlement aside for a moment and consider the median income in the US – about $50,000. About half below, about half above. Entitlements are for everyone – the half above and the half below, although a sizeable percentage of the half above, have resources beyond entitlements, to assist their living situations (whether medical or daily costs). It is the percentage below that discussions center on and about, even when they do not reference the group specifically. One point in any argument on this issue would be to keep it vague and do not limit terms or understandings to any given group. It makes it more applicable and Mr. Miller handles this argument tact quite well.

I looked back at my Social Security statement. That statement is several months out of date, but the numbers will not change and the date is not material. I selected 20 years of taxes and ‘contributions’ to the entitlement programs for comparison. I was quite young, starting work very young, no college degree – much like a majority of young people today. My total contributions (my portion of the payment) to social security were $10,614.00. My total contribution to Medicare was $7,594.00.

Of course, the payroll taxes have increased since I started to work, but the general argument is not in question. If I ‘retired’ at 62, and I lived until I was 82 (and I would hope I can manage a few more than 82 years), I would receive in Social Security $111,120. Slightly more than I paid in by over one hundred thousand dollars. If I retired at 67 and lived 20 additional years, I would receive $157,680 in social security payments. More than $145,000 above and beyond what I paid in to social security. If I quit working at age 70, and lived until I was 82, I would receive $117,360.


Am I entitled to more than $100,000 beyond what I paid into the system? When I am 67, I will fall down, break my arm, and fracture my wrist. Broken arm – very least $2500. Wrist – no idea, but say $1000. $3,500 total without doctor’s costs and medication. Moreover, suddenly we have spent half of what I contributed to Medicare. Am I entitled to suck out the resources after my contribution limits have been reached?


The answer is quite simple – because we have spent a lifetime contributing to the ‘system’ and the system made us a promise and … not quite.

Social Security was never intended as a forever and ever and ever program to make you feel better. The original program had a life expectancy of 50 years and would wither away at that time. Social Security was intended as a safety net, in case you fall. Not as a cover, your living costs and allows you to have satellite or all 400 cable stations.

Furthermore, the program was always a pyramid scheme. Take from the workers and give to those retiring. This works excellent when you have workers. We do not. Those who are contributing, like my personal example, are NOT contributing anything to the system ($10,000 covers nothing, and $7500 covers less) and certainly not enough to cover the majority who are retiring. I am not exact on numbers but we have 1 worker for every 1.8 retirees, and soon we will have 2 retirees and 1 worker. HOW is that going to work. Where is that entitlement coming from and what insane person would continue to argue we maintain the status quo because we paid into it and that is that.

Insolvency comes to mind: Greece, Ireland, Italy, Spain, and France … there are not enough workers to make the payments we have made all along. We do not have the workers and before you argue that, we should bring in more immigrant workers, remember they are paid about what I was paid, and contribute enough to cover a manhole cover on the street, NOT the Social Security payments for retirees.

Entitlement? Our country is entitled to the support and defense by its citizens. Not only in time of war, but in time of need – we must sacrifice in war and in times when maintaining the current level of support is untenable without bringing the entire economic house down upon us. The answer is not to tax the rich more – we have seen what the ‘rich’ do when they are taxed – the move their corporations to Mexico, India, Pakistan, Indonesia … everywhere else but this country. If we fail, we not only destroy those entitlements Mr. Miller is supportive of, we undermine the economic and ultimately the military strength of this country.

I am entitled to be protected from the wolf and I don’t care if you have a broken arm. I do not want to be eaten and that is of primary importance to me, and to society.


Make Mine Freedom - 1948

American Form of Government

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