Question for attorneys and politicians only--Soc. Security--entitlement?(edited title)

Can someone kindly explain to me how Social Security and Medicare are entitlements, when they have been, for generations, billed as an insurance?
Granted, it was a social insurance scheme, but how did such become considered an entitlement, hence, whatever is paid in would potentially be defaulted upon.
Something that both common sense and ancient common law would consider outright theft.

I am neither a lawyer nor politician but I think your problem is one of definitions. You are using the word “entitlement” in a particular way. Yet like many words it has more than one meaning.

In short, it is the name we call those types of programs.

I am eager to hear the explanation. Especially for those of us who have to pay taxes for Medicare and Social Security. But isn’t that pretty much everyone who has enough income to not be on welfare?

Why no, it isn’t. Most people who earn so little they can collect welfare pay Medicare and Social Security taxes, and many wealthy people who have income from dividends, rents, capital gains, partnerships and the like pay no Medicare or Social Security at all.

Those taxes are pretty much collected only on income that shows up on a W-2.

Those S.S. taxes are also collected on Schedule C net profit. I report my income and pay taxes on it; admittedly this may place me in an endangered species group.

First of all, I’m insulted that this question is directed to “attorneys and politicians only”. This question requires no particular legal expertise, and God help us if we have reached a point where only politicians can discuss political issues.

Social Security and Medicare are “entitlements” because eligibility to receive benefits is established by law, as opposed to by appropriation at the time benefits are paid. When I turn 62, if current law is still in force, I will be “entitled” to receive SS benefits. Congress will not need to pass a separate act appropriating money to pay SS benefits for Freddy the Pig.

Of course the law can be changed at any time. That doesn’t mean that the programs aren’t “entitlements”, it just means that entitlements can be changed. In practical political terms they’re very difficult to change, for obvious reasons.

Whether or not SS and Medicare are properly descirbed as “insurance” is left as an exercise to the reader, but is an independent question. They are entitlements regardless of whether they are also insurance.

To amplify what Freddy the Pig said, one must be aware that the terms “social insurance” and “entitlement” can be used in several different senses, with different implications, but that does not mean that they are contradictory.

  1. “Insurance” or “social insurance”: the payroll tax is known as the Federal Insurance Contributions Act (FICA). One could say that Social Security and Medicare operate like an insurance program in that people pay in, they are not guaranteed to receive all their money back, but if certain things happen, they will start drawing benefits.

Even though Social Security is sometimes thought to be a pension program, it really isn’t: people don’t get their own Social Security accounts, one can draw on Social Security not only after retirement but in case of disability, and there are benefits that can be paid to surviving spouses and the like.

So, in some respects, Medicare and Social Security are like insurance programs run by the government. The major difference is that everyone who draws income is compelled to pay in, but people aren’t generally required to participate in private insurance programs (like life insurance or nursing home insurance or whatever).

  1. “Entitlement” – there are a few closely-related definitions to this word. In one sense, entitlements can refer to social programs by which if you meet a set of criteria, you receive a government benefit. Social Security, Medicare, and VA disability compensation are all examples of entitlements.

Entitlement can also be used as a political term, which some people associate “entitlement” with “bad spending.” One could say that “earmark” is a similar term – if Congress adds any money to a program, whether or not it is for some pork-barrel thing, some people will say “that’s an earmark” in order to label it as inherently wasteful spending.

Finally, entitlements can also refer to a category of government spending that does not need to be approved by Congress each year. “Direct” or “mandatory” spending are synonyms for this term.

So, because Social Security and Medicare both have features of a social insurance program (contributions are pooled, but only paid out in certain events), the benefits are paid according to laws which define eligibility, and they are within a certain budget category, they can be considered both entitlements and insurance programs.

ETA: By the way, both of the threads you have started with directions that they should only be answered by attorneys, were not really complex questions that require legal training to answer. They were pretty much public policy questions. Maybe next time your questions can be directed to lawyers, politicians, public servants, and those well-versed in current events. :wink:

I suppose the public servants could be amended, the problem is that there are quite a few folks out there who proclaim that they are well-versed in current events, but have absolutely no clue of what they are speaking about.
Hence, the request for those who would be capable of answering from a more professional standpoint than from the hyperbole of some wing or another.
No offense intended. :slight_smile:

If the intent of your precondition was to avoid political hyperbole, I would submit that you chose the entirely wrong side of the division to request your sampled information from.

Beyond the simple definition of “entitlement” (cited by Freddy Pig), the word now has (as noted by Ravenman} a strong political implication (that “entitlements” are bad things or a misuse of money.) Under Freddy Pig’s definition, other “entitlements” would include the right to bear arms, the right to trial by jury, the right to free speech, etc. Yet, somehow, the people who are yelling to curtail welfare because it’s an “entitlement” are not argueing for gun control. :slight_smile:

In Washington Budget speak, an entitlement is an on-going program that does not need renewal; versus something, like repairing the interstate, or feeding the military, buying new fighter jets, DARPA research, etc. that requires a budget to be presented and passed every year.

It has nothing to do with what the program was called or what you think “entitlement” should mean. It’s an accounting term for certain programs with certain spending processes. “Meet these criteria and Washington will pay the bill” no matter how many or how high the bills are.

So social security, medicare, etc. are in place and pretty much keep going the way they are until congress decides to change or stop them. Do nothing, and the required amount of money gets spent every year. (Provided there is enough tax money to cover them).

The political argument over entitlement programs is this - they are a runaway train in a sense, they don’t need to present a budget, unless congress designed it with with a cap (or added one) the amount to be spent is detemined by the parameters of the program. As a result, something like medicare has a cost growing much faster than inflation, as medical costs go up, drug costs become prohibitive, and doctors expect to live a lifestyle like an educated professional.