Opinion

The Great Debate

The war over ‘entitlements’

It’s all in the wording. Throughout this presidential campaign, voters have heard a stream of claims and counterclaims about “entitlements” – payments the federal government makes to individuals.

The power of words to frame political ideas can’t be overemphasized. How we label specific practices and proposals affects the ways we think about them. Decades ago statisticians and economists used a neutral phrase, “transfer payments,” to describe various government disbursements: unemployment assistance, old-age pension support, food for the hungry, disbursements to veterans and federal employees.

By calling these “transfer payments,” they sought to focus on accounting techniques. They wanted to avoid the kind of charged labeling and stigmatization that we see today -‑ which prevents thoughtful discussion of the effects and benefits of these practices.

Now, amid a divisive presidential campaign, no such circumspection about word choice exists in the public debate about economic and social policies. Political leaders today use words that distort rather than illuminate, provoke rather than inform.

Liberals speak passionately about commitments to working people and those in need, all of whom are “entitled” to disbursements either earned or sought. Conservatives, in contrast, question not only the justification for such payments but also the sustainability of programs that seem to grow inexorably and exponentially over time.

from Lawrence Summers:

Time nears for an American tax overhaul

However the U.S. presidential election turns out, the trifecta of the Bush tax cut expiration, the debt limit ceiling on the horizon once again, and the Congressionally mandated sequesters – cuts in domestic spending – will force the president and Congress to wrestle with fiscal issues either in a lame duck session after the election or in early 2013. The decisions they make will have profound impacts on America’s fiscal future.

For many observers, the central question on the table is about entitlement programs: What will be done with them? Growth in entitlement spending associated with our aging population and its rising health care costs is the major factor in overall federal spending growth. But the capacity of near-term policy changes to have large impacts on that spending is less than many would suppose. The rising ratio of retirees to workers means that Social Security benefits at current levels will not be sustainable without some kind of tax increase. Sooner or later, revenue will have to rise or else outlays will have to be curtailed. While it is surely better to act sooner, the reality is that, out of necessity, action on entitlements is inevitable.

While almost everyone agrees on the desirability of containing federal health care spending, this is likely to be more difficult than we'd like to believe. Certainly beneficiaries can bear more of the cost of their government insurance than others, and there are steps like malpractice reform and the further encouragement of preventive medicine that should be taken. Yet without intrusions into the private health care system that are unlikely to be politically acceptable, there are severe limits on what can be done. Otherwise the result will be unacceptable cuts in the availability of care for the clients of federal programs. Given all the uncertainties associated with new technologies, changing lifestyles, and ongoing changes in the private system, health care reform will and should be a continuing project.

We won’t save money by cutting education

By David Callahan
The views expressed are his own.

Nearly every day, if not every hour, some politician proclaims that taming America’s budget deficit requires “hard choices.” Strangely, though, few talk about perhaps the toughest dilemma facing the supercommittee, and the rest of Congress: How to reconcile the needs of old and young Americans.

Both groups have urgent and growing claims on the public purse. Four million seniors live below the official poverty line and millions more hover just above that line – contrary to the popular image of well-heeled retirees. And because the Baby Boom generation hasn’t saved nearly enough for retirement, such hardship is likely to get worse. Deficit hawks talk about cutting Social Security benefits and limiting Medicaid payments for nursing homes, but the truth is that seniors will need a more generous safety net in coming decades than what the U.S. now has.

Meanwhile, a new report on the “State of Young America” by Demos (where I work), argues that America is way under-investing in the next generation. Too many young people who graduate from our under-funded public schools aren’t ready for college and can’t earn a living in today’s low-wage economy. Those who do go to college often can’t afford to finish their degrees, and debt among college graduates has soared to record levels. Young adults trying to start a family also struggle with sky high costs for childcare, housing, and healthcare. At the same time, median earnings for young adult men with college degrees have barely budged since 1980.

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