World News Trust: Ending Entitlements (Hal Cohen)

[Tace]

Hal Cohen -- World News Trust

Jan. 18, 2009 -- Update on a theme:



When they came for the homeless, I said nothing-

For I was not homeless

When they came for the poor, I said nothing-

For I was not poor

When they came for the unemployed, I said nothing-

For I was not unemployed

When the came for the part-time worker, I said nothing-

For I did not work part time

When they came for me, no one said a thing,

For the rich don’t give a shit.



Like so many others, I am excited about the incoming Obama Administration and a new direction for our country. In the interests of disclosure, yes, I pulled a lever for Senator Obama. That being said, I wish to offer my advice to our President-elect. Over the last several weeks, indeed the issue that led to your breakaway has been the economy. There can also be no doubt that a majority of Americans want out of Iraq. But as these issues have dominated news coverage, entitlements have been a silent drag on our social progress and they need to end.

As the “Most liberal senator,” a title rooted more in rhetoric than reality, many people would think me insane to suggest that Welfare, Social Security, Medicare and Medicaid could possibly end in an Obama Administration. They would be correct. Despite my many claims to the contrary, I am not insane. So how do I reconcile the seeming contradiction I have just presented?

The truth is that I do not wish to end the programs. I want to retire the term “entitlements.” It sends the wrong message. The implicit message in entitlements is that people are receiving something that they did not earn but to which they have the right. Just this past week a Republican official actually said, and I’m paraphrasing, that at least slaves had to work to earn their food and shelter -- as opposed to those freeloaders on welfare.

more

http://www.worldnewstrust.com/wnt-reports/commentary/ending-entitlements-hal-cohen.html

[exboyfil]

1. Entitlement is a bad name

but we have to recognize the different groups which receive dollars from the government.

Bankers-

The bailouts have been a disaster and has been charaterized as a "Sacking of the treasury". Bush/Paulson's bailouts were the final nail in an awful administration. The question that has to be asked is why did so many Democrats go along with the approach? Other options than voting a blank check to the Treasury were discussed at the time (the best one being letting the equity owners go down and letting the debt owners take ownership of the banks). The very name TARP (Troubled Asset Relief Program) should have been a signal of the problem. If they are troubled assets why should they be carried on the U.S. government's books? Actually, the concept of taking an ownership position in the banks made more sense, but the implementation was also handled poorly. How many of the dollars the Federal government is actually going to get back is in question, but taking ownership positions is different than just spending the money? In any event most of the management for these banks/insurance companies should have been sent packing, and the shareholders should have taken steps to claw back as much of the bonus compensation they could from the executives misstating what was going on in their companies.

Social Security Recipients-

Most S.S. retirees today receive more in benefits than can be actuarially justified by their contributions. In a sense what is past is past, and I am not saying we can change the decisions made in the past. Some correction mechanisms have been implemented such as taxing S.S. over a certain income level, but this, in general, targets the folks who probably did "pay their way" with the highest contribution levels.
The beauty of the S.S. system is that it has the folks who did not contribute sufficiently to justify their retirements thinking that they have. In current year dollars and current year program defined benefits, the break point is probably around $50,000 income. Those below that income level are subsidized by those over that level.
For the middle income earners ($50,000-$100,000) they are basically paying to play in our economic system. The folks really carrying the water for S.S. are two income families with each making around $100,000. The difference in what they pay in S.S. versus what they get out compared to a single income family of $200,000 is truly astonding.

Unemployment Benefits-

The problem with unemployment benefits is that too little is withheld during boom times. I look at how little my employer pays in unemployment taxes (my last paycheck of 2008 says YTD of $56 for Federal unemployment), and I wonder where the money comes to pay unemployment. The whole concept of funding unemployment needs to be addressed once we get through this recession.

If unemployment benefits are set at too high a level, then they do become a disincentive to make hard choices. I think we have a significant percentage of the population that does not recognize that when you lose your job, everything is now on the table including relocaton.

In economic recessions unemployment should last longer because it is truly harder to find another job. If folks had contributed to their "insurance" more during the boom time, then these benefits can be justified, and they are not an "entitlement".

Welfare Benefits-

Those impacted by events outside of their control.
In theory disability is handled, in part, through S.S. so workers being funded by that system are not receiving "entitlements". They are receiving benefits from a pooled insurance program (just like retirees). A level of subsidiziation still goes on in this system. Another group I would add are those who cannot fund health insurance before they are diagnosed with preexisting conditions. This is the reason we need Universal Health Care with in initial no preexisting condition buy in.
Others you can add to the group are individuals that through external circumstances are never able to develop marketable skills that allow their participation in the labor market. In most cases their parents have failed them along with a contributory failure by the public school. At least in my state I can see a clear path to a public university education for the very poor who are truly committed to getting there. The same might not be said about other states.

Those whose life decisions have contributed to their current situation.
As I see it the largest group in this category are individuals who start families without recognition that certain factors need to be in place. First and foremost is steady employment. The stability of your partner also needs to be a consideration. Why start a family without these conditions in place? In general a society can support a few who make bad choices but every society eventually reaches a tipping point.

I guess I am not convinced that everyone wants to work and support their family. When my father lost his job he moved to where he could get a job. When I was in danger of losing my job (which I eventually lost) my partner and I put off having a family until my employment situation changed. Is it too much to expect that most individuals in our society make these choices? Am I a bad person to have these expectations?

I read a story about a mother, daughter, and granddaughter in Detroit. The mother was complaining that some “entitlement” program was not paying sufficiently (or she was not getting what she was “entitled” to). The daughter is a high school student, and the mother is unemployed and getting paid to care for the grandchild. No where in the story did any mention of the two fathers come up. The fact that the question was not even asked, “What are the two fathers doing to contribute to this family?” says more than anything else about our society.