Does Entitlement Reform Have a Name Problem?

Oct 21, 2013

Photograph: Flickr user, 401(K) 2012. Licensed under a Creative Commons Attribution-ShareAlike 2.0 Generic license.

Does building political will for entitlement reform require a name change? Robert Samuelson thinks so:

Let's drop the whole notion of "entitlement." Just eliminate it. Politicians, pundits and academics who talk about entitlements would then have to name the actual programs and argue their merits and demerits. This would encourage clarity and candor.

He’s got a point.

In every post on FreeEnterprise.com discussing entitlement reform, a commenter declares that these programs aren’t “entitlements” but “earned” benefits because they paid for them with their taxes. This avoids the fact that most people will get more out of these entitlement programs than they’ll have paid into the system.

What’s more, Samuelson writes that the benefits from these programs aren’t guaranteed:

Political leaders' casual references to entitlements encourage people to think benefit programs are legally untouchable, at least in the sense of cuts. People are "entitled." The trouble is that it's not true; the popular view of entitlement has little standing in law. In a 1960 decision, Flemming v. Nestor, the Supreme Court ruled that Congress can alter Social Security benefits as it pleases. The court made it clear in later decisions that "the payment of Social Security taxes conveys no contractual rights to Social Security benefits," says a Congressional Research Service report. Legally, other entitlement programs are similarly vulnerable.

If the public can better understand these facts, then leaders in Washington can move ahead toward on needed reforms.  Doing so will do much for debt and deficit reduction, because as Samuelson reminds us, these mandatory spending programs are where huge bulk of federal spending lies:

You can't easily restrain federal spending without controlling entitlement programs. In 2012, Social Security, Medicare and Medicaid alone represented 44 percent of spending; all entitlement programs were 63 percent. But it's hard to control entitlement programs because their constituencies are so large.

This isn’t to say large changes are required. “[H]uge savings over decades can result from modest shifts in eligibility requirements and benefit levels. These could be phased in to make them more palatable and less disruptive to the economy,” writes Samuelson.

Maybe Samuelson is right that a better word will make it easier to sell entitlement reform to Washington leaders and a skeptical public. No matter what term is used, these programs are on an unsustainable path and need to be fixed before they impose drastic costs on Americans and the economy.

Learn more at the U.S. Chamber’s “Ten Truths About America’s Entitlement Programs.”

 

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