Saturday, October 23, 2010

The Tea Party's Chance to Overhaul the Welfare State

One of the most pressing issues that might be decided by the November midterms is the fate of the modern welfare state in the United States. Some tea partiers such as Rand Paul envision a much smaller one in years to come.

I have said before that I think most voters will not want big changes to programs that benefit them like Medicare and Social Security. But one possibility that is not usually talked about is means-testing Medicare and Social Security for middle class and wealthier citizens. At first glance, this simply seems like a common-sense move to save lots of money.

But one of the reasons Medicare and Social Security are traditionally more popular than Food Stamps or Temporary Aid to Need Families (typically called “welfare”) is because such a wide swath of the population benefits. There is a selfish motive to keep funding those programs because the average voter expects to benefit from them one day. Moreover, people can relate to those who do benefit because they are not so different from them.

If the average middle class citizen no longer receives Medicare or Social Security, he or she will not have the same personal motive to retain the program. Moreover, he might become resentful of those who do get benefits.In the 1980s, people who received aid from certain programs were termed “welfare queens.” They were seen as people who had not worked hard in life, and who did not deserve to have taxpayer dollars spent on them.

Perhaps the same fate will await shrunken Medicare and Social Security programs. People who receive benefits might be called “welfare grannies” who spent a whole life riding around in pink cadillacs not working. For some voters, this will be particularly galling as these grandmothers might have been the same ones who took in welfare benefits for so many years. With voters angry about program beneficiaries, will they be sympathetic to politicians who want to end the program entirely?

To make sure that enough voters have a staking in continuing Medicare and Social Security, politicians will have to allow the majority of voters to continue receiving decent benefits. They might prevent millionaires from receiving benefits. But they will allow people who led middle class and maybe even upper middle class lives to receive benefits. The problem with this is that while it will save some money, I doubt it will make the program solvent.

So tea partiers find themselves in a difficult situation. If they want to make meaningful cuts in the programs, they have to stop a broad portion of the population from benefiting. If they do that, they may be drummed out of office. However, if they make only small, politically palatable cuts, they won’t obtain their goal of balancing the budget. Just maybe though, they will accomplish a cherished dream many of them have but don’t give voice to: the abolition of two huge entitlement programs.

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