Monday, March 07, 2011

Social Security as a "Welfare Program"

Robert Samuelson could have written a much shorter column than this,
We don't call Social Security "welfare" because it's a pejorative term, and politicians don't want to offend.
Translation: "I want to call Social Security 'welfare' because I consider that term to be pejorative." That interpretation of Samuelson helps explain why he spends so much time and effort trying to tear down Social Security rather than addressing how it might be made (even more) sustainable. Let's take a look at his arguments....

The first argument offered by Samuelson appears to be that Social Security is "welfare" because "Social Security, Medicare and Medicaid, the main programs for the elderly, exceed 40 percent of federal spending." I thought we were talking about Social Security itself, though, not "Socialsecuritymedicareandmedicaid". The relevant spending figure is that for Social Security, not for Samuelson's personal conception of a three-headed beast. By combining the three, Samuelson gets to avoid admitting that Social Security can be "fixed" with modest adjustments to taxes and benefits, as opposed to the "massive deficits, huge tax increases or draconian reductions in other programs" he sees as necessary to maintain "Socialsecuritymedicareandmedicaid" at present levels with no change in medical inflation. I'm not familiar with any definition of "welfare" that is contingent upon how much a unit of government spends on a particular program.

Samuelson provides a definition for his conception of a "welfare program":
Here is how I define a welfare program: First, it taxes one group to support another group, meaning it's pay-as-you-go and not a contributory scheme where people's own savings pay their later benefits. And second, Congress can constantly alter benefits, reflecting changing needs, economic conditions and politics.
To me, that seems like a bait and switch. After all, Samuelson appears to want to use the term "welfare" as a pejorative, to convey the idea of a wealth transfer from the deserving to the undeserving. The first prong of his definition is more consistent with the Constitution's "General Welfare Clause", Article I, Section 8, Clause 1:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Now perhaps Samuelson truly believes that government spending that inures to the benefit of the general public, necessarily resulting in a transfer of wealth, is a "welfare program". But while he has devoted countless columns to railing against "Socialsecuritymedicareandmedicaid", I'm having a hard time thinking of a time when he has come down hard against, say, corporate welfare. Or where he has taken the position that we spend far too much taxpayer money on ensuring the safety of food and pharmaceuticals.

In fact, under his definition, it's difficult to conceive of any government spending program that benefits an individual that he would not describe as "welfare" - are there any such programs that are "contributory scheme[s] where people's own savings pay their later benefits"? You paid property taxes for fifteen years, then your kid started school? School is a welfare program! You pay taxes to build and maintain roads in your community? Welfare program! Public parks? Welfare program! Snow removal from public streets and highways? Well, you get the idea. And yes, if we're using the conception of "welfare" found in the General Welfare Clause, those are "welfare programs". But that's not the definition Samuelson wants us to infer - that's not the pejorative.

The second prong of Samuelson's definition, "Congress can constantly alter benefits, reflecting changing needs, economic conditions and politics"? I'm having a difficult time thinking of a single item in the federal budget for which Congress cannot alter spending and policies based upon its perception of "changing needs, economic conditions and politics", whether or not the spending might fall under the General Welfare Clause, Commerce Clause, or... you name it. So how is this aspect of the definition meaningful?

It's possible to make cogent, honest arguments for the reform of Social Security. It's even possible to present the perjorative definition of "welfare" - the one Samuelson sidesteps with his bait-and-switch - and admit that your real objection is to Social Security as a transfer of wealth to people you see as undeserving. It's a shame Samuelson is unable to articulate such an argument.

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