Reimagining the Social Safety Net
Posted on November 30, 2012When policy makers talk about entitlement reform, they usually are looking at the impending budget crisis caused by retirement programs that continue to grow unsustainably.
What they need to do is look beyond the dollars and cents, and think about America’s social safety net and how fundamental reform is desperately needed.
Social Security was founded in 1935, Medicare and Medicaid in 1965, and welfare was reformed in 1996. Medicare was updated during the Bush Administration to include a prescription drug benefit.
Social safety net programs are meant to help several different subsets of American society. Social Security is a retirement program, but it is also helps people who have profound (and not so profound) disabilities. Medicare mostly focuses on the health care of retirees, although it also helps younger people who have been afflicted with terrible diseases like ALS. Medicare and Medicaid (a program administered by the states) share a class of people, called dual eligibles. These are poor seniors who qualify for both Medicare and Medicaid. Temporary Assistance for Needy Families (or TANF) is the welfare reform program that is aimed at getting people off of welfare and into work.
There are other programs administered through the tax code, like the Work Opportunity Tax Credit, that help get people off of welfare, and Earned Income Tax Credit, that give incentives to people to stay at work, even if staying on welfare turns out to be a better deal.
It seems to me that there are four distinct groups that need four distinct approaches to the social safety net. And there are three distinct ways that the Federal government can help them.
Four groups rely on the help from the government. First, there are children who live in poverty. They are the most vulnerable and the most valuable commodity in America because they represent the future. Second, there are the truly disabled, people with severe handicaps, mental health issues, etc. Third, there are those who are adults and who are able-bodied who can’t or won’t find a job. And fourth, there are retirees, many of whom have plenty of money but have paid into the social security and Medicare programs and want a return on their investments.
There are three ways the government can help. First, it can give cash payments or the equivalent in tax relief. Second, it can provide critical services, like education and job training programs or public housing. And third, it can be a third party payer, i.e. paying doctors and hospitals via reimbursement.
All three approaches are vulnerable to fraud committed by flim-flam artists and cheats.
It seems to me that there should be different approaches to how we approach these four groups, with an eye towards accountability and efficiency. We also need to rethink how much money we spend on each group.
We don’t spend enough on children and we spend too much on retirees. We spend too much on able-bodied people who should be able to take care of themselves and not nearly enough on the severely disabled, especially the mentally ill.
People who are of sound body and sound mind and can work shouldn’t get a dime of assistance. Not a dime.
Retirement security for able-bodied Americans should mostly be handled by the private sector. People are living longer and they should be forced to rely less on government programs and more on their own planning. There should be aggressive tax incentives for younger workers to buy long-term health insurance and to participate in retirement plans. The government should not be in the business of making retirement cushy for rich seniors. Younger Americans should also be forced to buy health insurance that they have for life. This can and should be offered by the private sector, and regulated by the government.
No young person should be forced to live in squalid conditions. If their parents can’t take care of them, they should be taken care of by the government. Kids can’t take care of themselves, especially young ones. When children are ignored and allowed to grow wild in the streets, they become a danger to society. If parents can’t handle their children or won’t take care of them or are homeless, the government must step in. The government, of course, can’t do it all and they should work with religious and other charitable organizations. Government also has a moral and economic imperative to adequately educate these children so that they can become productive citizens.
Mentally ill people should not be forced to fend for themselves. The number of homeless veterans on our streets is a national disgrace. Bag ladies should not have the freedom to wander around. They should be cared for in a safe environment.
One final point: We don't spend enough money on the basic research required to conquer the two most debilitaing diseases to hit the elderly: Parkinsons and Alzheimers. This is a necessary role of government because these two diseases suck the American people dry emotionally and financially. If we can crack the code on how to prevent these two diseases, we will make America's seniors more productive well into their Golden Years.
Imagine for a moment that we became a nation that took care of its children, took care of its disabled and mentally ill, took care of its homeless veterans, made its able-bodied adults work and required that its seniors adequately plan for their retirement years. We would be a stronger; more compassionate, and better America.