Right On: Entitlement programs, Congress and budget disasters

Social Security Card image courtesy of Medicaid, St. George News

OPINION — All federal entitlement programs were enacted with noble intent. Almost all have been irresponsibly expanded by Congress. Budget Armageddon is coming.

Unlike traditional federal expenditures, entitlement program funding is open-ended. Any individual or entity meeting certain qualifications is “entitled” to receive prescribed federal benefits.

The major entitlement programs are familiar: Social Security, disability insurance, Medicare, Medicaid, college student loans and grants, food stamps, unemployment insurance, Obamacare. The list goes on to more specialized entitlements: farm subsidies, the Export-Import Bank, veterans’ services and many others.

Each program targets citizens or entities worthy of our help. With the notable exception of Obamacare, each was popular when enacted and most continue to enjoy widespread support.

Popular or not, autopilot spending on these open-ended programs plus interest on the national debt totals about two-thirds of the federal budget and continues to grow in both dollars and as a percentage.

Hoping to curry favor with voters, Congress has expanded these programs over the years far beyond their original scope. The upshot: entitlement spending is out of control.

Congress catered to senior voters by increasing Social Security benefits 135 percent between 1965 and 1975 while the Consumer Price Index increased only 67 percent. Your parents and grandparents made out like bandits, receiving benefits far in excess of what they contributed.

In those days, Social Security receipts exceeded expenditures: There were about four workers per retiree. Today there are only about 2 ½ workers per retiree. As baby boomers retire, receipts will no longer cover benefits.

An insurance company that failed to foresee this coming would be out of business today. The congressmen who got re-elected by irresponsibly increasing benefits are dead and gone, leaving you, me and our children holding the bag.

Don’t take any comfort in the $3 trillion Social Security trust fund mirage. Like all federal trust funds, it contains nothing but federal government IOUs. There is no bucket of cash being held to pay future benefits, only promises to tax future workers as needed.

Obama acknowledged this fact in 2011 when he correctly stated that the government would be unable to mail Social Security checks unless Republicans increased the national debt ceiling. The Social Security trust fund couldn’t redeem its IOUs unless the federal government had cash in hand, in that case by borrowing more money.

But isn’t Social Security a contract with those who contribute? No, it’s a pay-as-you-go welfare program as the Supreme Court ruled in 1960.

Social Security’s Disability Insurance is in no better shape. Congress has increased benefits well beyond workers’ contributions. Further, abuse is rampant as cooperative doctors certify work-capable patients as disabled. In the 1970s, 2.2 percent of the population qualified; today 4.4 percent do.

Medicare is in even worse shape. Its Supplemental Medical Insurance costs are expected to grow from 2.1 percent of gross domestic product to 3.4 percent by 2037. This runaway freight train will consume impossible amounts of our federal budget unless benefits are reduced, but reductions are a political death wish.

Medicaid, free medical care for the poor, enrolled about 20 million recipients for 15 years from 1975 to 1990. Congress loosened eligibility requirements several times since then and enrollment has grown to over 73 million today.

Medicaid is politically popular; free stuff usually is. But of course, Medicaid isn’t free. Federal and state taxpayers spent over $553 billion on the program in 2016.

As expected, free services are abused, raising program costs. The state of Oregon audited its Medicaid recipients earlier this year only to find that nearly half no longer qualified.

Higher education entitlements – Pell grants and Hope tax credits – have grown from $19 billion in 2006 to over $50 billion today.

I have written previously about the ever-growing $1.4 trillion student loan entitlement disaster. Expect much of this total either to be forgiven by the federal government or never repaid. Guess whose holding the bag?

Like Ado Annie in the musical “Oklahoma,” politicians “cain’t say no.” All it seems to take is another heart-rending story about people in need of federal largesse. The next day a new entitlement bill is introduced in Congress and championed by the mainstream media.

Are the intended recipients needy? Yes. Is the anticipated cost forecast accurate? No. Will additional folks who miss the original entitlement cutoff be added later? Yes. Will the program grow seemingly without limit? Yes.

Perhaps the most important question is will any entitlement program ever be meaningfully restrained? It’s politically tough but it can be done. For example, Congress passed the bipartisan Social Security Reform Act of 1983. Politics were hyperpartisan then but both sides were willing to compromise.

We need a Congress that is once again willing to find a middle ground that preserves essential aspects of existing entitlement programs while reining in their open-ended drain on our budget. Meaningful steps to reduce fraud would be a good place to start.

The other half of the answer: No new entitlement programs, period. No matter how worthy or deserving the intended recipients appear.

We will always have societal problems; there will never be enough money to address them all. We need elected officials willing to set priorities and stick with them. And we need voters willing to support them.

Howard Sierer is an opinion columnist for St. George News. The opinions stated in this article are his own and may not be representative of St. George News.

Email: hsierer@stgeorgeutah.com

Twitter: @STGnews

Copyright St. George News, SaintGeorgeUtah.com LLC, 2017, all rights reserved.

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15 Comments

  • Craig October 19, 2017 at 8:01 am

    You are lumping programs that are real entitlement programs, Ie Social Security, with handout welfare programs that are charity.

    I’m entitled to Social Security because I was unconstitutionally forced to pay for it.

    You are not entitled to welfare; you did not pay for it.

    • Rainbow Dash October 19, 2017 at 12:55 pm

      So if a person gets laid off from a company through no fault of their own, they are not “entitled” to a little help getting through a few rough months while they look for another job? Are you seriously saying that unlucky person should LOSE EVERYTHING because of someone else’s mistakes?

      • panda October 20, 2017 at 1:16 pm

        Yes, you are entitled to Unemployment which is paid for by the employer through Unemployment Insurance. Welfare is a whole different animal.

    • bikeandfish October 21, 2017 at 10:03 am

      You are distinguishing between contributary and non-contributary entitlement programs. Both are still entitlements. That said, the citizens are still entitled to their legal right to “welfare” program funds if they meet the criteria. That remains a fact unless the laws are changed no matter how citizens want to frame the issue.

      Same goes for unemployment benefits talked about below.

  • statusquo October 19, 2017 at 8:41 am

    The only solution to curbing federal spending is term limits for congress and senate. Our elected reps need to be more concerned about the good of the country than their own reelection.

    http://www.termlimits.com

  • Sapphire October 19, 2017 at 9:12 am

    There is much ignorance in this article and no solutions other than to cut back instead of provide. Shall we haul everyone off to the landfill who can no longer contribute money to society? Only in the USA do we whine incessantly about the cost of helping ourselves while we spend billions of our taxes providing assistance and protection for everyone else on earth, even our enemies. My retired generation never thought twice about the social security being pulled from our paychecks. We were fine with helping the seniors and disabled. There is no middle ground. You either help those who can’t help themselves or you don’t. Almost half of seniors and disabled have no other income but social security which averages about $1400 a month, but much lower for many of them. Could you live on that amount? There will never be perfect answers and Medicare is working hard to reduce medical fraud. They also pay much less than billed by the medical profession which has to accept their payment table, so they are controlling costs. Anyone who complains about Medicare is uninformed.

    • bikeandfish October 19, 2017 at 11:13 am

      Individuals like Sierer rely on gross stereotypes to justify pre-existing ideologies. His use of the fear mongering phrase like “Armageddon” was just the first of many red flags.

      Civics needs to teach more about the conditions that existed before Social Security and how many of our elderly were destitute. As of 2017 Gallup polls more Americans approve of the ACA then disapprove likely because of how poorly insurance was regulated before it existed.

      I also think Sierer needs to study up on the advancements in diagnosis if he is shocked about how the #of disabled Americans doubled in that timeframe.

      We do need to reform our budget but constantly focusing on entitlements is a red herring.

      • comments October 19, 2017 at 10:43 pm

        Yep, first thing to understand is that Howard Sierer isn’t actually even a conservative–he’s a hardcore neo-con. He’s a much bigger supporter of globalism, big business, and predatory capitalism than he is actual conservatism. He even leans pretty far to the left on modern social politics like a true neo-con, not concerned about what’s good for our nation, but most concerned about what makes the most $$$. Dyed-in-the-wool neo-con parasite.

        • comments October 19, 2017 at 10:47 pm

          he may not be one of the actual parasites, but he seems to have high praise for them. much of his ideology is….. well, i’m no fan

  • mmsandie October 19, 2017 at 9:40 am

    I agree with Craig.. we work to put in SS Medicare etc.. i have worked 50 yrs and paid in the system .. when people say they get entitlements and never worked I get mad.. some people chose not to work and live off the govt..look at. what the polygamist did with million of dollars of fraud in food stamps buying vans , computers etc. and when caught Jeff’s was t9ld to pay back 1 million of the 20 million they used and 5 yrs in jail,, where is the justice? We know there is. Millions in Jeff’s trust.

  • Southpaw October 19, 2017 at 1:57 pm

    Social Security is an entitlement? Like most other folks I paid into the system for over 40 years and am now receiving my modest monthly amount. Fixing Social Security would be easy but no one in government has ever wanted to do it.

    For 20 years of my 40+ year career I paid in the maximum amount. I remember the first time I hit the limit. It was October, I received my paycheck and noticed a significant increase in take home pay. I called the payroll department and asked what was going on. They told me I had met my FICA requirement for the year.

    The amount at that time was around $52,000 per year. Once you hit that amount you no longer paid into social security. The amount has now been raised to in excess of $110,000 per year. Fixing the system would be easy enough. All people should pay into social security through their entire income stream. The middle class does.

    If you are a CEO or sports icon, actor, newscaster, or whatever, you should pay into the system for your entire income amount. If you are a football player making $32,000,000 a year, you should pay on the entire amount. You shouldn’t be able to stop paying once you hit $110,000, which is more than likely achieved on your first paycheck of the year. Middle class Americans who make $40,000, $60,000 or even $100,000 per year pay into social security for their entire annual income. Why not celebrities and others who make millions per year? We need a level playing field.

    Over the years I have written to my congress members and senators. I suspect you can guess the response to my letters. I never received a response. And guess what, it will never happen. The more you make the more you get to keep. It’s not fair. Never has been. . . never will be.

    • panda October 20, 2017 at 1:20 pm

      I agree. If there wasn’t a cap on social security withholding we wouldn’t have a problem.

    • Gary October 20, 2017 at 2:42 pm

      Ageed!! Well put!!

  • Gary October 20, 2017 at 2:40 pm

    One thing I disagree on!! SS is DEFINETLY NOT and entitlement!!! We and our employer pay into the system our entire working life!! We get paid back what we paid in!!! True if we live long enough we may actually get more than we paid in but the system was to be a retirement savings account as it were. The problem has been that the government tapped into the SS funds when they shouldn’t have touched them!!! They were suppose to be reserved only for the SS recipients!! Not an entitlement!!

    • bikeandfish October 21, 2017 at 1:11 pm

      By legal definition SS is an entitlement. Maybe it’s time our national discourse stopped using the term as a pejorative and reassessed the impetus for their creation in the first place. The political dialog of the 90s-00s polluted any chance at meaningful discussion but we don’t have to stick to that approach.

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