2.17.2010

Guest Post: Some Fresh Ideas

"In recognition of the dithering nature of our federal institutions, I submit that two relatively simple and straightforward changes in our entitlement programs might staunch the fiscal bleeding and catalyze additional, necessary reforms...


...the federal government should 1) institute a 5 year maximum amount of time that one may receive unemployment and/or welfare benefits and 2) eschew automatic eligibility for physical disability benefits in favor of opt-in coverage for additional premiums (i.e. taxes) for those workers who want the added security."

Ian F, a conservative Democrat - and friend of the blog, provides some refreshing thoughts on federal entitlement reform in the face of looming insolvency.  Read the whole thing below after the break.  I think it's very much worth considering.

The announced retirement of Sen. Evan Bayh (D-Indiana) this week comes against a backdrop of mounting public anger at Congress’s feckless handling of the economy as well as jaw-dropping—and unsustainable—fiscal deficits. While the Democratic Party is loath to infuriate those special interests that feed at the public trough, the Republicans proved in 2005 that they, too, are unwilling to implement critical changes to the nation’s entitlement system out of fear (largely irrational, in my opinion) of short-term electoral defeat.

The back-and-forth political vitriol is frustrating the ability of this—or any—Congress to address the staggering long-term fiscal challenges facing the country. Kudos to Rep. Paul Ryan (R-Wisconsin) for unveiling last month a Road Map to lead America to a responsible and sustainable future. Profound change, however, is unlikely to occur even if Republicans do retake both houses this November.

In recognition of the dithering nature of our federal institutions, I submit that two relatively simple and straightforward changes in our entitlement programs might staunch the fiscal bleeding and catalyze additional, necessary reforms.

First, we should enact limitations on the amount of time that an individual may receive public assistance (namely, unemployment and welfare benefits). These programs were originally intended to protect American workers and their families against unforeseen financial burdens and to provide for a period of transition to new gainful employment. Unfortunately the various statutory drafters declined to enact a maximum amount of benefits that any one person could receive. While their intentions were doubtless noble, these drafters have created the opportunity for benefits to flow ad infinitum to individuals who have little incentive to become self-reliant. Capping lifetime receipt of any of these benefits to sixty months (5 years) would both curtail federal spending and incentivize the recipients of public assistance to seek more permanent long-term financial security.

Second, we should eliminate automatic enrollment to receive public disability benefits and instead make this assistance an optional “buy-in” for workers who are willing to pay additional taxes from their paychecks.

Liberal skeptics will quickly note that appropriations for these programs are substantially less than for behemoths like Medicare and Social Security. True enough. However, like President Obama’s suggested “freeze” to limited portions of the federal budget, it places a renewed emphasis on fiscal responsibility and (unlike the freeze) it subtly shifts personal responsibility back to the American people. Franklin Roosevelt himself said,

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law [the Social Security Act] which will give some measure of protection…against the loss of a job and against poverty-ridden old age.” (see full quote here) (emphasis added)

Lest he be misinterpreted, President Roosevelt also noted,

“[C]ontinued dependence upon [government] relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.” (see full quote here) (emphasis added)

In other words, while providing assistance in someone’s time of need is an admirable—even patriotic—thing to do, endless assistance effectively saps a person’s will and ability to work independently. I do NOT blame the recipient of public assistance for this unfortunate by-product of the statutory and regulatory regime. If society stifles independence by terminating welfare benefits only upon a return to the workforce, rather than upon a predetermined time limit, the individual recipient will act in his or her own economic best interest and continue to receive the government benefits in perpetuity.

Disability benefits certainly present more of a political quandary. Not all persons with physical disabilities will recover from them, at least within 5 years. I adamantly maintain that individuals with mental disabilities deserve the highest level of compassion from their fellow citizens. Any proposed time limitation on benefits should exempt individuals with certifiable mental disabilities that prevent them from meaningfully contributing with dignity to the workforce. Persons with physical disabilities should be able to request extensions on benefits based on demonstrated need, as the current system allows. However, I believe that physical disability benefits, such as SSI payments, should not be conferred automatically as provided under the current regime. If, as Franklin Roosevelt suggested, Social Security is a form of public insurance, then we should allow those workers who want insurance for physical disabilities to opt-in by paying additional taxes.

Further explanation of my proposals and their effects may be merited but, in the interest of space and time, I shall conclude here.

In sum, the federal government should 1) institute a 5 year maximum amount of time that one may receive unemployment and/or welfare benefits and 2) eschew automatic eligibility for physical disability benefits in favor of opt-in coverage for additional premiums (i.e. taxes) for those workers who want the added security.  

Neither of these proposals alone, or even combined, will return the United States to fiscal health overnight. However, they put the American people on notice that the government simply can no longer afford to conduct business as usual. Exploding deficits weaken the country’s global standing and pose a serious security threat. In the spirit of compassion and responsibility, these measures begin the process of protecting our nation’s finances and reducing the real threat to our safety.