There are any number of highly-publicized programs at the federal or national level which, owing to the magnitude of the government’s struggle in these areas and the perceived battle involved of good vs. evil, they are framed in terms of a “war.” The war on drugs and the war on terror are two salient examples. These “wars,” because they involve so many complex factors—not the least of which is the human factor—tend to be quite nebulous in the way they are fought, especially in terms of cost overruns and pushing the envelope on abrogation of civil liberties and international law, if not blowing up a whole stack of envelopes on the latter count. As with any conflict, too, there tends to be a lot of collateral damage incurred in the fighting. Less publicized, but potentially tragically very real and injurious, is another war facing the nation: that of the war the Republican Party is waging against entitlement programs. In this case, the collateral damage is the welfare of the American people, and its imperilment should have us all paying attention.
Donald Trump, as part of his maneuvering to get into the White House, vowed not to make cuts in programs like Medicare and Social Security. Apparently, though, the Republicans in the House of Representatives didn’t get the message, though to be fair, they and Trump have been far from the unified front. Recently, Republican Rep. Sam Johnson out of the House Ways and Means Committee’s Subcommittee on Social Security unveiled a plan that would drastically reduce benefits for the majority of earners, including significantly raising the retirement age and reducing cost-of-living adjustments. While the poorest earners would stand to see gains in their benefit rates as long as they show a history of covered employment (i.e. can’t be one of those lousy freeloaders bringing down the country), provisions like the elimination of income taxes on Social Security would end up costing the program, not working to its benefit.
The obvious caveat in the railing against the GOP’s cost-saving methods is the notion that due to shortfalls in the Social Security trust fund, benefits are not guaranteed indefinitely. In fact, should spending not be significantly reduced or revenues prove insufficient to meet the fund’s needs by 2034, significant spending cuts are scheduled to automatically take place. So, Johnson’s “common-sense” plan is a good thing, right? Not so fast. Not only is slashing benefits as the main solution to the Social Security problem not the only alternative, but critics of the Republicans’ plan suggest it will only exacerbate the situation. According to Linda Benesch, spokeswoman for the progressive-minded organization Social Security Works, under Sam Johnson’s plan, cuts would be more severe than those which would go into effect automatically less than 20 years down the line. Moreover, despite the seeming merit of Johnson’s approach, according to Benesch, the uptick in benefits for the lowest wage earners would pale in comparison to the tax benefits to be realized by the wealthiest Americans. Once more, the Republican Party wants to make things even easier for the rich—when they arguably should be paying more, and even though it may negatively affect millions of Americans and for generations to come.
Social Security benefits are not the only benefits about which Republicans and Democrats are likely to rumble in the near future. As John Wildermuth of the San Francisco Chronicle reports, prominent Democrats and the likes of Bernie Sanders are gearing up with relish to go to battle with the GOP on the subject of Medicare, a program with a decades-long legacy of helping seniors meet healthcare costs in the United States. Speaking of Social Security Works, the organization sponsored a press conference some days ago, with figures like Nancy Pelosi, the aforementioned Mr. Sanders, and Chuck Schumer on hand to assert the position of the Democratic Party and liberal-minded people across America that Medicare benefits are off-limits, and to once more remind President-Elect Trump he pledged he would not slash benefits—if only to troll him by doing so.
For the non-Trumpian politicians representing the Republican Party, namely House Speaker Paul Ryan and recent Department of Health and Human Services appointee Tom Price, they have indicated Medicare is a priority, though they have apparently tabled that discussion for the new year. If past conversations on the matter are any indication, though, the GOP agenda on Medicare seems to be a shift toward private plans as opposed to government-paid insurance plans. Though somewhat dated, a 2011 Kaiser Family Foundation study cited by the Wildermuth article which looked at a previous plan proposed by Speaker Ryan found that his approach would force someone retiring at the age of 65 in 2022 to meet twice the out-of-pocket medical expenses as the one enacted under the traditional Medicare program. Noting this history of Republican efforts to make seniors’ benefits disappear, Democrats and millions of concerned Americans are right to be afraid. Very, very afraid.
The attempts by Republicans to gut entitlement programs broadly speaks to two pages out of the GOP playbook when it comes to federal funding and addressing the United States’ bad deficit spending habit. The first, as exemplified by Sam Johnson’s awful Social Security plan, is the refusal to raise taxes on the wealthiest earners, under the premise those companies and individuals at the top will be so overjoyed by their tax-based savings they will in some meaningful way re-invest in the American economy. Maybe they’ll, you know, buy a yacht, or rent a second apartment for their cat to live in exclusively. (If these ideas sound stupid, it’s because they are. Rich people seem to stumble for exotic and pointless ways to throw money at things.)
For all intents and purposes, this is indicative of trickle-down economics, a theory with which most of us should be familiar, even if nominally. The fat cats at the top spend money, thereby creating jobs and magically increasing the wealth of lower-level earners, and in turn, these lower-level earners, because they apparently now have money to blow, contribute to the economy by spending as well. It’s a nice idea—everyone gets richer—even if it blatantly justifies the belief that people at the top of the food chain are there because they are inherently smarter, or harder-working, or what-have-you, and not that they have had any number of advantages including being born into wealth. The only problem is that trickle-down economics doesn’t work. Instead of the benefits of the rich extending to the poor, the wealth amassed by the wealthy tends to stagnate in their hands, especially when stashed in any number of tax shelters and havens domestically or in places like the Cayman Islands that have gained notoriety for their complicity with this financial strategy. The rich get richer. The poor get poorer. Those within the middle class get pushed to either extreme. Trickle-down economics, eh? More like the rich pissing on the poor.
The other page of the proverbial GOP playbook embodied by the partisan fight over Medicare and other healthcare programs is the knee-jerk push to privatize everything. Private healthcare plans. Private schools. Private prisons. Private eyes. Private parts. Everything private! The presumption is that the private sector, unfettered by the ravages of excessive, suffocating government regulation, and in line with the individual’s desire for choice as opposed to a public sector mandate or hand-me-down, is inherently a superior option. The reality, however, is that this may not necessarily be the case. Even in the days of the Reagan administration and into the tenure of George Bush the Elder, criticism of a burgeoning trend toward privatization of government assets and services was present. In 1991, John B. Goodman, assistant professor at the Harvard Business School, and Gary W. Loveman, CEO of Harrah’s Entertainment, Las Vegas, co-authored an article for the Harvard Business Review exploring whether or not privatization really serves the public interest. Though there’s a lot to consider within the piece, Goodman and Loveman—or as I would have it, Team GoodLove—aim to shift focus of the debate away from a simple black-and-white discussion of private vs. public, and to consider the role good management should play regardless of ownership. From the article:
Refocusing the discussion to analyze the impact of privatization on managerial control moves the debate away from the ideological ground of private versus public to the more pragmatic ground of managerial behavior and accountability. Viewed in that context, the pros and cons of privatization can be measured against the standards of good management—regardless of ownership. What emerges are three conclusions:
1. Neither public nor private managers will always act in the best interests of their shareholders. Privatization will be effective only if private managers have incentives to act in the public interest, which includes, but is not limited to, efficiency.
2. Profits and the public interest overlap best when the privatized service or asset is in a competitive market. It takes competition from other companies to discipline managerial behavior.
3. When these conditions are not met, continued governmental involvement will likely be necessary. The simple transfer of ownership from public to private hands will not necessarily reduce the cost or enhance the quality of services.
The implications herein, I feel, are important ones. For one, there is no given better alternative between the public or private domain. The more important dimension, it would seem, is whether the goals and incentives of managers and their agents are aligned with the wants and needs of the general public/shareholders. Furthermore, when competition within the marketplace is discouraged or company incentives encourage reckless or otherwise counterproductive/inefficient use of resources, governmental involvement in the form of regulation is warranted. Of course, this regulatory interceding must be kept in check and in balance. Too much heavy-handed, burdensome regulation can stifle productivity and growth, as has been the refrain from conservative Republicans and even small businesses. However, too little intervention on the government’s part has its own perils. Just look at the conditions which led to the Great Recession, or even more recently with giants like Wells Fargo abusing the public trust by creating a high-pressure sales model that encouraged mid-level managers to defraud customers. And to think Wells Fargo’s new CEO, Tim Sloan, wants the U.S. government to roll back regulations! Talk about a disconnect from the public interest!
So, what will Donald Trump’s likely role be in the Medicare and Social Security debate as President of these United States? As is the usual with Trump, no one knows for sure—even with the aforementioned campaign pledges of his to keep his small, child-like hands off these entitlement programs. The concern with President-Elect Trump is that, in light of the notion he lacks substantive policy positions, he will defer to Paul Ryan and his ilk, thereby allowing Republicans to slash and dash their way to a reduced budget. As much of a blockhead as Trump is, though, one would think even he would see that a strategy which puts his adopted party at odds with older Americans—a group that helped him get elected, mind you—seems almost suicidal. You want to keep out foreigners? Nice! We didn’t want to have to learn Spanish anyway! You’re tired of political correctness holding us back? Shit yeah! You’re coming for our hard-earned benefits and money that helps us pay for drugs and other expenses? Uh, wait, back the trolley up there, mister!
See, it’s all fun and games until you go after people’s benefits, especially those which are designed to get them through retirement. And it’s not just current baby boomers and older who have a stake in this. For millennials like myself and younger, the viability of programs like Social Security and Medicare seems like even less of a sure thing, and while some of you may be thinking we’re too busy taking selfies to contemplate such matters, it’s not necessarily true. Though I can’t claim to speak on behalf of the average member of my generation, I personally, by mere virtue of watching sports and absorbing the myriad commercials that air during stoppages of play, see constant reminders about the need to plan for retirement, and need look no further than my favorite team, the New Jersey Devils. They play in Prudential Center in Newark, and viewing their games on TV, I have seen so many commercials with Daniel Gilbert, Harvard professor and social psychologist, that I feel like I know him personally. We young folk, you know, want a future, too, and with Republicans threatening entitlement programs and, among other things, denying that climate change is real, we’re understandably not thrilled that we may have to take a ferry to get to work as a Wal-Mart greeter when the seas rise significantly above present levels. I’ve heard more than one of my cohorts lament that our generation is royally screwed, and admittedly, it’s hard not to feel like that sometimes.
As noted earlier, and as alluded to in John Wildermuth’s article, Democrats are apparently preparing “with relish” to entrench themselves in an arduous long-term battle with GOP lawmakers about protecting programs like Medicaid, Medicare and Social Security. The implicit notion herein is that there is substantial political capital to be gained by standing with average Americans who don’t wish to see their benefits torn asunder by the Republican Party. However, the Democratic Party, as recent electoral events have shown, haven’t really been able to capitalize on the weaknesses of their rival. Many considered Hillary Clinton’s winning the election over Donald Trump a slam-dunk in light of the hateful rhetoric and apocalyptic visions hurled around indiscriminately by Trump and his followers, and maybe they were as out-of-touch as those in whom they believed. But Hillary was a flawed candidate, and the Dems, loyal to a fault and somewhat naïve in the belief “love trumps hate,” stuck by her, only to have the Republican Party nominee take the election despite losing the popular vote, and to have the Republicans retain control of the House and Senate.
They lost, in large part, due to what can only be termed as an abandonment of the working class, not to mention a refusal to embrace more progressive policy elements, such as a $15 minimum wage. The fight over Social Security and similar programs is thus a way for Democrats to re-build a bridge to the America below the upper-middle class and top 1% thresholds, but I would argue their commitment has to be stronger. Having talking heads like Nancy Pelosi, Bernie Sanders and Chuck Schumer addressing the issue is great, but all those carrying the blue flag have to be active and vocal in affirming their party’s and their own personal commitment to participating in that fight now—not just when they’re running for re-election. Especially as the minority in Congress right now, that voice needs to be amplified by a singularity of focus from the people with the most immediate opportunity to affect positive change.
On your and my end, meanwhile, I believe the most important contributions we can make are in terms of awareness and involvement. Concerning the former, at any attempts by politicians like Sam Johnson to craft plans which would significantly dilute the power of benefits programs, we should share this knowledge, and increasingly so when a vote is scheduled either in the House/Senate or even when we are asked to cast out ballots on referenda related to this subject. Concerning the latter, regardless of our own party affiliation of that of our elected representatives, we must hold them to their desire to stand with us on ensuring the safety of our hard-earned benefits for generations to come with calls, E-mails, letters and petitions. I may be pulling a bit of a DJ Khaled in referring to an amorphous “they,” but they don’t want to you know what they’re doing to entitlement programs. They don’t want you involved in the political process. That’s how they win. With specific respect to Republicans, and in one more nod to Khaled, in this era of social media and widespread connectedness, they may have just played themselves.
There’s a war going on over programs like Medicare and Social Security. Which side are you on?