War on entitlements

Posted: 11 March 2013 in Uncategorized
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Thomas Edsall’s essay, “The War On Entitlements,” should be required reading for everyone interested in challenging the elite view that has come to govern the present debate about programs like Social Security and Medicare.

In particular, Edsall pushes back against the two favorite elite strategies for reforming current entitlement programs: means-testing of benefits and raising the age of eligibility.

The idea of subjecting earned income over $113,700 to the Social Security payroll tax and making the Medicare tax more progressive – steps that would affect only the relatively affluent — is largely missing from the policy conversation. . .

Means-testing and raising the age of eligibility as methods of cutting spending appeal to ideological conservatives for a number of reasons.

First, insofar as benefits for the affluent are reduced or eliminated under means-testing, social insurance programs are no longer universal and are seen, instead, as a form of welfare. Public support would almost certainly decline, encouraging further cuts in the future.

Second, the focus on means-testing and raising the age of eligibility diverts attention from a much simpler and more equitable approach: raising the payroll tax to apply to the earnings of the well-to-do, a step strongly opposed by the ideological right.

Third, and most important in terms of the policy debate, while both means-testing and eliminating the $113,700 cap on earnings subject to the payroll tax hurt the affluent, the latter would inflict twice as much pain.

Is it any wonder that elite austerity nuts have been trying so hard to push their preferred reforms to existing entitlement programs?

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