Why Progressives Support Welfare for the Rich

Since Republicans are pushing entitlement reform and Democrats
like taking money from rich people, you might think they could
agree on means-testing Medicare and Social Security as part of a
deficit reduction deal. Yet many Democrats are surprisingly hostile
to the idea of tailoring these programs to help people who actually
need them.
There are two main reasons for this resistance—one strategic,
the other ideological. Neither is persuasive, even from a
progressive point of view, at a time when trillion-dollar deficits
are the norm and publicly held federal debt is
projected to reach 150 percent of GDP within two decades.
“I don’t see want to see Medicare turn into a welfare program,
which is what it would be if wealthier people didn’t benefit from
it or had a significantly reduced benefit,” Rep. Keith Ellison
told ABC’s George Stephanopoulos on Sunday. “It needs to be
something shared that Americans are all in, that we all participate
in and we all contribute to.” Ellison is co-chairman of the
Congressional Progressive Caucus, which
opposes any cuts to Medicare or Social Security benefits.
The strategic rationale for this position is that reducing or
eliminating retirement subsidies for people who can easily get by
without them would spoil the illusion that all of us are “entitled”
to those benefits because we have “earned” them through our
“contributions.” In reality, Medicare and Social Security are
funded through intergenerational transfers from relatively poor
workers to relatively affluent retirees.
That does not sound terribly progressive, but left-leaning
opponents of means testing worry that narrower versions of these
programs would be politically vulnerable. “If Medicare turns from
an earned benefit into a welfare program,”
warns Max Richtman, president of the ;National Committee to
Preserve Social Security and Medicare, “you will see support
There is not much evidence to support that prediction. In a 2010
Heritage Foundation
report, Katherine Bradley and Robert Rector counted “over 70
different means-tested anti-poverty programs” and noted that
spending on such programs “has grown faster than every other
component of government over the past two decades.”
Furthermore, Medicare and Social Security already are transfer
programs; they are just poorly targeted. If the aim is to prevent
the elderly from sinking into poverty or to ensure that they can
obtain the medical care they need, it hardly makes sense to use
payroll taxes extracted from middle- and working-class employees to
cut monthly checks to Michael Bloomberg or subsidize prescription
drugs for Ross Perot.
Both programs do include some modest means tests. The monthly
premiums that help fund Medicare are higher for wealthier
beneficiaries, for example, and the share of Social Security
benefits subject to tax is larger for retirees with higher
incomes—functionally equivalent to reduced benefits.
But with Medicare and Social Security facing
unfunded long-term liabilities of $42.8 trillion and $20.5
trillion, respectively, they need to move much further in the
direction feared by Ellison and Richtman. As Andrew Biggs of the
American Enterprise Institute
observed last year in National Affairs, “It is
inevitable that Social Security, Medicare, and other government
programs will become less generous toward the rich than they are
If progressives are having trouble adjusting to this reality, it
is not only because they (mistakenly) believe means testing will
jeopardize these programs. As William Voegeli observes in his 2005
Never Enough: America’s Limitless Welfare State,
progressives’ counterintuitive resistance to means testing also
stems from a communitarian vision that sees universal participation
in tax-funded social services as inherently good.
Voegeli quotes Robert Kuttner, co-editor of The American
Prospect, who in his 1987 book The Life of the Party
argued that “there is immense civic value to treating middle-class
and poor people alike.” According to Kuttner, “a common social
security program, or medical care program, or public school
program” fosters “social solidarity.”
You may or may not find this vision appealing. Either way, we
can no longer afford it.

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Why Progressives Support Welfare for the Rich

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