I’m puzzled. For as long as I can recall I have been assured that the Grand Old Party will do just about anything to advantage their wealthy friends and benefactors. Of course, no party desires no taxes – not even Republicans — and none – not even Democrats – want full confiscation. So the issue always comes down to the question of how one will square the circle. Should the top marginal rate be 35% or 40%? Aside from the flat tax advocates and a few outré progressives, few are now arguing for 25% or 50%.
Statecraft inevitably involves a distribution of responsibilities and benefits. And, as I have noted, it is traditionally the case that Democrats ask for more sacrifice from the wealthy and Republicans advocate for fewer benefits for the needy.
This being part of our political logic, how then do we explain a central feature of the Republican plans for Medicare and for Social Security, and how do we explain the hesitancy of most elected Democrats to embrace this plan?
One area in which there appears to be some measure of agreement between President Obama and Speaker of the House John Boehner is that means testing Medicare and perhaps even Social Security should be “on the table” – a Thanksgiving turkey, as it were. The argument is that the wealthy might receive fewer benefits or should have to ante up more in the way of co-payments. What’s up with that? In important ways, one should appreciate why Democrats would like that idea and why the Republicans should resist, but things have not quite transpired in that logical way.
Despite the element of soaking (or at least dampening) the rich, some Democrats have pushed back on the idea of means testing Social Security and Medicare. One could readily make the argument that it is unjust or undesirable for the federal government to send out checks to those same rich folks on whom Democrats wish to raise the marginal tax rates. Couldn’t receiving fewer benefits be a form of shared sacrifice so integral to Democratic talking points?
Historically there have been reasons why means testing some social benefits have been problematic (although not for others, such as food stamps). Social Security, and to some degree Medicare, has long been defined as an insurance program and not a welfare program, even though they were designed to help seniors who needed a safety net after retirement. Still, the rationale for their passage was that everyone would partake; the benefits applied to everyone and the program was politically palatable. The assumption – an assumption that in 2011 is somewhat implausible – is that if these insurance plans become welfare programs that are means tested, they will be more vulnerable to sharp cuts for the most needy, even leading to calls for dismantling that safety net entirely. That everyone receives these social benefits means that everyone is invested in their success. In a somewhat similar way, although with a different perspective, we find Republicans worried that we are nearly at the point at which half of all Americans do not pay income tax. In such a circumstance, what incentive is there for those who do not pay to keep rates low? (The answer seems to be wealthy interest groups that both parties rely upon.) By opposing means testing, Democrats are pandering to the very same upper middle class to which they accuse Republicans of pandering. Pandering is politically addictive.
When one thinks about it, the desire of Republicans to means test these programs flies in the face of our convenient and easy beliefs, and it is a breath of fresh air. Means testing would in effect mean that the well-to-do will be paying more for their retirement and their health care. Perhaps this is a reason that President Obama, although not many of his supporters, such as the AARP, is willing to consider this particular option. For those who wish to redistribute government support towards the bottom and for those who wish to redistribute sacrifice towards the top, means testing makes sense.
It is not the case that all of the Republican plans for Medicare and Social Security will necessarily have this (salutary) effect. Privatization benefits some wealthy people at the expense of those less able to find suitable coverage, and the changes in determining inflation-based growth rates have problems of their own.
Still, at this parlous time in which we must consider how to have the most fortunate among us pay a larger share of the cost of necessary programs, a reasonable means-tested Medicare and Social Security can help close the budget gap. So let us all hail the Republicans as they propose means testing. On this, they are the party of class warfare, as they might say if they considered the matter carefully. Let us be thankful that they haven’t. And let Democrats take this option to reach across the aisle to achieve the very ends for which the party has been calling. Let us agree by all means.
This is an interesting issue. I suspect that you are right. The Federal Government offers a numbers of types of insurance: unemployment insurance; Medicare (health insurance); Social Security (retirement insurance); flood insurance, and their may be others. Each involves the contribution through fees (taxes) for the expectation of a paid benefit. If the Federal Government chooses to default on its obligations (some would argue that unless major changes are made in most entitlements, the government will default, it is just a matter of time), then confidence in honoring its obligations falters. This is the major problem. The Constitutional “taking” of real property is severely restricted, and requires compensation to the injured party. I’m not sure how this applies to private property. Means testing for people in the existing programs is a default of obligations, and is dangerously close to the concept of a taking. I think that this is why both parties are moving slowly on this one. My recollection is that the Democrats have resisted dealing with the issue; and the Republications have had some proposals for people under the age of 55.