Eric Laursen today describes the GOP desire to limit Social Security only to those people who are too sick to work, then goes into the research describing why it’s not so easy to identify who’s too sick to work. He doesn’t say so (Jacob Hacker does, I believe in The Great Risk Shift), but the same is true of income variability. We might have a mental model of “the poor” as those who always and everywhere have low income, and there may be such people, but there are a great many more who suffer periodic negative shocks to their income. (Same sort of thing is true of “the homeless”; see Malcolm Gladwell.)
So here’s my cynical take:
- Sorting out eligible from the ineligible requires huge administrative overhead rather than simple age-based eligibility. This is exactly what the GOP wants: a Federal program that works poorly. Two examples of the GOP playbook come to mind here. First, consider their demand that abortions be allowed only when the mother’s life is in danger. Along with all the other things we could say about this, just imagine the regulatory and legal overhead it creates; how many times will doctors be sued because they allowed an abortion when the mother’s life wasn’t at risk? Even if they always win those lawsuits, a great many doctors will opt out of providing abortions purely to avoid a lawsuit.
Second, I think of Bill Kristol’s famous memo on defeating the Clinton health-insurance initiative, particularly this:
“Health care will prove to be an enormously healthy project for Clinton… and for the Democratic Party.” So predicts Stanley Greenberg, the president’s strategist and pollster. If a Clinton health care plan succeeds without principled Republican opposition, Mr. Greenberg will be right. Because the initiative’s inevitably destructive effect on American medical services will not be practically apparent for several years–no Carter-like gas lines, in other words–its passage in the short run will do nothing to hurt (and everything to help) Democratic electoral prospects in 1996. But the long-term political effects of a successful Clinton health care bill will be even worse–much worse. It will relegitimize middle-class dependence for “security” on government spending and regulation. It will revive the reputation of the party that spends and regulates, the Democrats, as the generous protector of middle-class interests. And it will at the same time strike a punishing blow against Republican claims to defend the middle class by restraining government.
What possible interpretation of this paragraph could there be other than “it will work, so we have to defeat it”?
The ease of separating eligible from ineligible is one of the big arguments for single-payer health care, by the way. Hospitals will no longer have to employ teams of people who specialize in dealing with individual insurers; there will be just the one insurer. And identifying eligibility is easy: you’re a citizen, so you’re eligible. There may be other knocks against single-payer health care, but low administrative overhead is one of its main selling points.
There’s a maxim that “a program for the poor becomes a poor program”. A great way to remove mass support from Social Security is to isolate its constituency. If it’s those people over there who get Social Security rather than you and me, then we’re less willing to fight for what’s ours. If this model is right, then increasing the generosity of Social Security — so long, of course, as the funding increases commensurately — might raise its likelihood of survival, by increasing the political support behind it.
Consider: when the average Social Security benefit is $1335 a month, you and I might fight for it; but if it gives us a hefty monthly payout in retirement, we might fight a lot harder. What would “hefty monthly payout in retirement” mean? Well, the usual story is that you should save enough to earn 80% of your pre-retirement income in retirement. Median household income nationwide is $53,046 per year. 80% of that is $3,536.40. How hard would you be willing to fight for Social Security if you knew that you’d be receiving $3500 per month from it in retirement?
And that’s not at all an insane number to expect. Social Security was assumed to be part of a three-legged stool of retirement savings: your company’s pension, your savings, and Social Security. Pensions have significantly weakened, and 401(k)s have not kept up. (I’ll want to look around for the numbers: total assets held in defined-benefit retirement vehicles and total assets held in defined-contribution vehicles over time.) As for the saving rate: I’ve not looked into how it’s defined, but this quick FRED graph doesn’t say anything optimistic. So why not increase the monthly Social Security payout to 80% of the monthly median household income?
My model of political support might be wrong, of course: that maxim needs to be backed up by empirical support. But enough people believe it’s true that I read a book a few years ago, a significant part of which was devoted to understanding why Medicaid is still alive. Shouldn’t Medicaid have become “a poor program” long ago?
The more our welfare-state programs apply to everyone, I believe, the more politically secure they’ll become. And along the way, they’ll be cheaper to administer. We should all want these things.