Why Are Liberals Opposed To Means Testing Social Programs?

Great Debates
21

Means testing requires additional bureaucracy (proccessing,verification, enforcement), imparts stigmatization to recipients, is too daunting for many who are unable to “work the system” and allows for a minority who are discriminated against because the are close to meeting the means test but don’t. As I understand it, right now in America 40 million people are without healthcare because they don’t qualify for medicaid and they can’t afford health insurance. In short, a minority always gets the short end of the stick. There is nothing quite as fair as the entitlement for all citizens to get a decent education, care in old age, and good medical care.

Citizens are entitled, because regardless of their direct economic input into the tax base, all citizens have donated their heritage, their portion of the resources of the nation. Too often the value of this heritage is ignored, and the resources consumed by the wealthy at a gluttonous rate and at subsidized cost all too often based on extraction costs or market with little consideration of its value as a heritage for the citizenry. Universal programs of minimal care address that discrepency.

22

There are problems with that. As a taxpayer, I’ve been paying for food stamps for all these years, should I get them too? And we all pay for agri-subsidies: even though I don’t have any cultivatible land, I want my share!

Oh yeah, and I want an ICBM armed with a nuke. Been paying for that sucker, too. :slight_smile:

23

There are problems with that. As a taxpayer, I’ve been paying for food stamps for all these years, should I get them too? And we all pay for agri-subsidies: even though I don’t have any cultivatible land, I want my share!

Oh yeah, and I want an ICBM armed with a nuke. Been paying for that sucker, too. :slight_smile:

24

Despite the problems with means testing that have been mentioned in this thread, I’m all for it. There are a finite number of dollars that can be spent for public assistance to the needy, and they need to be put to the best use possible. I’m for means-testing social security benefits (already been done, in part, by taxing benefits past a certain income level - a liberal idea, btw), food stamps, subsidized school lunches, whatever.

I’d love it if we could means-test agricultural subsidies, which have nothing to do with liberal v. conservative - they’re a bipartisan outrage, thankyewverymuch.

25

No argument about farm subsidies. They aren’t even a benefit program any more. They are just pure pork, and most of the money goes to huge conglomerates like ADM.

I understand the desire to not ‘stigmatize’ people. I understand that you want to avoid loopholes that prevent the needy from getting help.

But what I don’t understand is that you automatically go from there to a belief that closing loopholes is worth applying regressive taxes to the middle and lower classes and giving the money to the rich. As cost-benefit tradeoffs go, that seems like a particularly bad one.

(BY the way, the ‘you’ I’m referring to is just people who support universality in general. I realize that Stoid and RTFirefly are more in my camp on this one).

26

**Sam Stone **:

I believe that, despite your claims, studies of social security have shown that the program overall is not regressive…it is mildly progressive. I am certainly in favor of ways to make (or, that have made) it more progressive, such as taxing benefits.

However, one also has to recognize political realities and the fact that many conservatives are not interested in making S.S. more progressive but rather in a “divide and conquer” strategy to basically get rid of it altogether. Maybe if more conservatives were out there arguing in favor of progressivity and downward redistribution then we would trust that they would not try to use a narrowing of who gets social security benefits as a first step to further destruction of the social safety net!

27

Actually, I may have to back off this statement. It seems there is a fair bit of controversy over whether S.S. is progressive overall. Here’s a couple recent papers and discussions that I found:

http://www.aei.org/past_event/conf011015b.pdf
http://www.nber.org/digest/may00/w7520.html

It is not clear to me whether these studies included the current taxation on social security benefits.

28

When I see the gluttonous waste of resources and money that goes on by the upper middle class, The huge houses, numerous plane trips, numerous yachts and the continually increasing yacht size dominating the market, the ultimate in hedonistic resource consumption, I can’t accept that our society can’t do a hell of a lot more than it is.

And keep in mind that the benefits of universal support programs accrue to all, including those who may pay a little more in taxes. But for the average person, the increase in taxes is offset by inclusion in the benefit. I don’t understand your claim that universal programs tax the lower classes only and turn the cash over to the rich.

29

Sorry to keep banging on about this, but is there some dispute about means testing causing poverty traps? Or is it an uncomfortable fact that people who feel ripped off by “middle class welfare” would simply prefer to ignore? It is no answer at all to point to the rich getting a benefit they are perceived not to deserve unless you consider the very real costs to the poor of means testing.

If you don’t believe me that it’s an issue, here’s the The Penguin Dictionary of Economics entry on the matter. If you think it’s an issue only big government lefty economists worry about here’s certified small government right winger Arthur Laffer:

Like I said policy isn’t easy. Pointing at Jack Welch getting free drugs and feeling outraged about it is not policy analysis.

30

Another liberal checking in to say “I have no problem means testing benefits.”

I’d RATHER see benefits similar to public education. Everyone is entitled to good basic public education. Want to send your kid to a private prep school and better his chances for Harvard - you pay.

I’d like to see everything work the same way - anyone can stay in public housing (but who would want to if you could afford to live somewhere else?), anyone could get medical benefits (but if you want to pick your oncologist and hospital you’d better have private insurance). Free daycare for all! (But I’ll be leaving my children in their private daycare). I do realize this isn’t terribly practical - but think it is the fairest method.

(Course, then you get people that say “it isn’t fair I can’t afford Choate - I need vouchers” - but that’s a different problem)

31

Dangerosa, you said that you have no problem with means testing, and then describe an argument against them. So just where do you stand?

32

I consider myself liberal, having voted for Mondale and Dukakis and proud of it, and I have no problem with means testing for social programs. I believe that poor people should have free or subsidized health care, including prescription coverage. However, I see no need to subsidize the affluent elderly.

Democratic proposals for free prescriptions for all elderly regardless of income is indeed pandering to the wealthy seniors. The simple reason this pandering occurs is that wealthy seniors vote and vote in large numbers for their own self interest. I will believe that Republicans are any better when I see the first Republican proposal to means test Social Security.

33

Exactly where I said I stood. I have no problem means testing benefits. If I were supreme dictator of the United States, benefits would not be means tested, but I don’t think that would fly politically. And no one ever said us liberals weren’t practical :stuck_out_tongue:
I’d rather have means tested benefits than no benefits at all.

34

Okay, let’s narrow this down a bit, because the prescription drug benefit was mentioned above, and that’s the program that got me thinking about this in the first place.

To me, this program seems like a natural for means testing. First, it’s not an entitlement. It’s a new benefit, and no one has paid into it. Second, Seniors as a group are among the wealthiest members of society, so it seems to me that a huge chunk of the prescription drug benefit is going to go to people who are wealthier than those who were taxed to pay for it.

So, should this program be means tested? The tricky part of this when dealing with seniors is that they often have a large net worth that may or may not be liquid, but they may have quite a small income. A typical situation might be a senior who owns a $500,000 home, has a private pension that pays $1000 a month, and SS benefits of maybe another $1000/mo. Now, this person has an ‘income’ of only 24,000 per year, but that’s $24,000 of after-tax money, and with a very nice home owned free and clear.

Is this person impoverished? Should this person have his or her prescription drugs paid for by, say, a young family with two children, a big mortgage, but an income of $35,000? Such a family is probably living paycheck to paycheck, yet they are ‘middle class’.

Can we at least agree that the rich old guy with a million dollar home, $500,000 in investments generating $50K a year, a $5,000/mo corporate pension, and a social security check should not also be given free prescription drugs just because he happened to turn a magic age?

This prescription drug benefit thing really baffles me, to be honest. It wasn’t even on the radar screen a couple of years ago. No one cared. Now suddenly, we’re all acting like the world will collapse if the poor seniors don’t get their prescription drugs. And this program is EXPENSIVE. The Democrats plan is something like 700 billion dollars over, I think, six or seven years, and even the Republican’s plan is 300 billion over the same period. That’ll make it one of the biggest entitlements around.

It’s double concerning because of the demographic bubble that is putting an ever-greater percentage of the population in the ‘senior’ territory, and less and less people in the workforce to pay for their benefits.

It seems to me that now is the time to be taking a hard look at the CURRENT benefits seniors get, because I’m not sure we’ll be able to continue paying for the current ones 10 years from now. People are worried about Social Security and Medicare going bust. So why the sudden need to pile on another 700 billion in seniors benefits?

If it were up to me, I would offer a compromise package - You can have prescription drugs for seniors on a means-tested basis, but the money for it will be paid by means-testing Medicare. Rich people can pay for their own health care.

35

Just to clarify a point - “entitlement” does not mean something that people have paid into. Before welfare reform, for example, AFDC was an “entitlement” even though no one paid an AFDC tax.
Instead, entitlement means that, if you meet certain criteria, you are entitled to the benefit as a matter of law.

Overall, Sam I don’t think you have made your case that means testing is a liberal/conservative dividing point. There are certain programs where liberals favor means testing, certain programs where conservatives favor means testing, and certain programs where neither favor means testing.

Sua

36

No, because that gentleman has payed handsomely into the public coffers, so why shouldn’t he access the benefit? Why should he have to pay extra taxes to administrate and enforce a program that will arbitrarily exclude some people including himself. If someone pays an extra $100 per month in taxes to access $120.00 per month in benefits isn’t that pragmatic, fair and just? ( arbitrary figures of course, to illustrate societal saving in administrative costs) Or do we see a benefit in civil service job creation here :(.

37

Social Security is unsound? Really. Hasn’t this argument been around since it was first proposed, and hasn’t it become increasingly more stable over time. While the return is poor, it is sounder than any other “pension plan” that I am aware of and backed by the U.S. government. Calling Social Security unsound is classicly begging the question.

38

The problem revolves around the definition of “means”. Are assets means? Are only liquid assets means? Who decides?

At some point it’s easier to set a single standards saying no one will ever go without X(where X is the benefit the program provides) and not means-test it. This puts some trust in society to not draw benefits they can pay for themselves. I know this is just begging for some level of abuse, but the alternative is a society where people don’t have X(food, healthcare, shelter, education, whatever).

As a counterpoint, I know someone who was denied for food stamps because her son, who was providing a good amount of the household income, financed a used car with a blue-book value over some minimum. The reason he got the new car is because he had been spending tons and tons of money on repair after repair for his previous vehicle. $400 a month on repair bills versus $200 a month on a car payment for a vehicle in better shape is a wise decision from almost any standpoint, but it put them in the situation where they had too many assets(dollar value of their assets was considered in this case) to meet the means-test.

Means-testing is fine as long as it can be fair. The denial of food stamps because of the new purchase of a reliable vehicle(more valuable than the old one) for the breadwinner to use for transportation to and from work was not really fair IMHO. Can you promise a system where this kind of thing won’t happen? One that eliminates enough potential candidates to save the program enough money to justify the extra paperwork and overhead of tracking each participant’s means? Eliminating the people in the position of “the rich old guy with a million dollar home, $500,000 in investments generating $50K a year, a $5,000/mo corporate pension, and a social security check” drops a very small percentage of potential recepients from the program. You have to cut more people than that to save the program enough money to offset the overhead of means-testing.

Enjoy,
Steven

39

Eh? Do you live in a parallel universe? Do you understand how SS is paid for and the changing demographics of the US workforce? The unsoundness is based on clear trends that show that there will not be enough workers paying SS tax to cover the benefits of all the retired people. The increased soundness over the last 20 years is a result of the huge increase in the SS tax implemented during the Reagan administration. The original intent was to bankroll the excess to cover the shortfall down the road. Since congress spent that excess instead of saving it we are in even worse shape because further increases in the payroll tax will be quite onerous, especially to the working poor.

Yes, SS is backed by the US gov, but at what level of taxation (or deficit)?

40

On the other hand, there are some who argue that the “sky-is-falling” arguments about social security are overstated. See, for example, Social Security: The Phony Crisis