285. "Post-Election Safety Nets," Challenge, (Nov.-Dec. 1996), pp. 4-7.
One cannot but hope that after the 1996 elections both major parties will agree to form a joint commission to develop a national policy on entitlements. Among those who recently called for such a commission is Republican Jack Kemp. The liberal position on this issue favors maintaining the basic system while making some limited adjustments. It is much less clear what position conservatives will bring to the table. This is especially true when it comes to "conservatives with a heart," who must consider what to do for the deserving poor, abandoned children, the victims of catastrophic illnesses, and other truly vulnerable members found in even the most accomplished society.
This voter, at least, despite thirty-five years of experience in policy analysis, cannot decipher the conservative or GOP position on the welfare state. When I raised this matter with a Republican intellectual, he allowed that the whole matter was not a big deal as "after all, most people are not on welfare." Most Americans, however, attach a great symbolic significance to the way welfare is treated.
They correctly sense that whether or not one allows the breeding of dependency, and what one plans to do with those on welfare, tells volumes about one's conservatism and compassion. In short, welfare is one of those litmus-test issues for social philosophy and public policy.
Second, the safety nets at issue concern the economic and psychic security of most Americans, including those who will probably never need welfare. By far the largest programs, Medicare and social security, are nets spun to pick up all Americans. Even Medicaid, which to most people is a program that serves the poor and the disabled, now spends about 60 percent of its funds to enable regular folks to put their parents into nursing homes.
Moreover, in an age of rising anxiety, safety nets are of special concern for millions who previously worried little about them. Many Americans believe that they are within five paychecks of the street. A May 1995 poll reported that a third of Americans were already having trouble meeting their monthly expenses for housing.
More recent polls show that Americans are rapidly becoming more anxious. In November 1995, 66 percent of Americans were worried that they could not afford health care (up from 50 percent in 1994); 48 percent worried that they could not save enough money to retire (up from 42 percent); 44 percent worried that they could not pay off college tuition (up from 37 percent); 38 percent worried that they could not afford to keep a home (up from 31 percent); and 34 percent worried that they would lose a job or take a pay cut (up from 28 percent).
It would be unfair to suggest that conservatives have not addressed the social safety net question; the problem lies in the fact that they are addressing it simultaneously in four different, at least partially incompatible, ways. Die-hard conservatives argue that the whole government-supported social safety net system should be scrapped and people should rely on their own savings and hard work. The more people are made to fend for themselves the stronger and better they will become. Jack Kemp opened recent remarks with a quotation from Abraham Lincoln, a great Republican, "The progress by which the poor, honest, industrious, and resolute man raises himself, that he may work on his own account. . . is the great principle for which the government was really formed." Charles Murray writes in Losing Ground: American Social Policy, 19501980 (Basic Books, 1994), "Our final and most ambitious thought experiment consists of scrapping the entire federal welfare and income-support structure for working-aged persons, including AFDC [Aid to Families with Dependent Children], Medicaid, food stamps, unemployment insurance, and the rest." Conservative columnist James K. Glassman states, "The time has come to end social security as we know it and allow Americans to build their own nest eggs."
Verne Barry, in a remarkable statement in the conservative Policy Review, goes further. He argues that churches should not pick up the slack:
If all government welfare ended tomorrow and churches and charities picked up the slack 100 percent . . .the social tragedy of welfare [would not have] changed at all. The purpose of welfare reform is not just to change who is doing the giving. It is, rather, to change the hearts and minds-indeed, the lives-of those who have never known anything else. . . . Churches are in the soul-saving business, not the social service business.
Far from relying on voluntary associations to help those the government might drop, true die-hards would go the other way. Republican Representative Sam Brownback, for instance, would eliminate even the existing deductions for charitable donations.
This rugged-individualistic view does not offer much to chew on for compassionate conservatism and even less solace to an anxious electorate, such as a 50-year-old executive who worked all his life, paid taxes in full, raised children, and has been out of work for two years, with no hope of a job in sight. His unemployment benefits have long been exhausted; he cannot continue to carry his medical insurance or pay the mortgage.
A close second are the privatizers. They come in various shades and hues, but privatizers basically favor allowing Americans to leave the social security system and set up personal tax-deferred savings accounts to stash away funds for their retirement. Similarly, Americans should be able to leave Medicare, set up their own medical-care accounts, and draw on these funds to buy private health insurance for their old age. In both accounts, Americans would be free to invest the funds as they deem fit. Among the leading privatizers is Steve Forbes, who has an elaborate scheme for privatizing social security. Wall Street in general, and the mutual fund industry in particular, is salivating at the very mention of the riches entailed in privatization.
All these schemes offend die-hard purists because while they take the government out the front door, they bring it back in through the back door. All these programs assume huge tax subsidies and considerable government regulations, such as those that currently govern IRAs (you must start to withdraw money by the time you are 70 and a half there is a stiff penalty if you take out more than x percent over y days; you may not invest in collectibles and so on).
Privatizers do not warm the cockles of the hearts of compassionate conservatives either. What about the poor who cannot set aside funds for existing or new IRAs? What about someone who suffers from a prolonged illness at a young age? What about the children of a couple killed in a car accident? Once you roll up the nets intended to catch everyone, you leave many free to crash.
Most privatizers argue that they would leave the governmental safety net in place (at least for a transition period) for those who cannot afford any of the privatized options. Policy wonks, however, point out that once a safety net is means-tested or covers only the poor, it becomes stigmatized and loses public support to the point that it becomes difficult to sustain.
Civil society champions come to the rescue with a rich web of voluntary associations and religious institutions that stand by to pick up the pieces. These civic bodies are motivated by faith, a sense of charity, and civic virtue. Their services are low in cost, humane, and individualized They will pick out those truly in need. The churches and company, though, argue that they are overburdened as it is and could not possibly take on much more. Many agencies and institutions currently labeled as voluntary or "private" hospitals, shelters, and clinics could already be considered dependent on government appropriations.
Civic champions (sometimes called communitarians), led by Republican Senator Daniel Coats, drafted fifteen bills seeking to rain various government subsidies, reimbursements, and credits on civic bodies and do-gooders who take care of those in need. They include bills such as the Compassion Credit Act (S1216) and the Community Partnership Act (S1218). Republican Senator John Ashcroft proposed allowing states to funnel welfare dollars directly to churches and other openly religious organizations. Such ideas make many liberals worry about a violation of the First Amendment, and conservatives, such as Michael Horowitz from the Hudson Institute, are concerned about the corrupting effects of giving government largess to civic bodies.
Yet another position is taken by some of the Washington-based political leaders of the GOP, who argue that the two largest governmental safety nets are untouchable. "Medicare is a sacred commitment," Speaker of the House Newt Gingrich stated. Republican presidential candidate Robert Dole expressed similar sentiments. Irving Kristol has been chastised by William Buckley, Jr., for favoring the existing social security system and for statements such as, "If the American people want to be generous to their elderly, even to the point of some extravagance, I think it is very nice of them."
Commenting on the statement that Medicare and social security must be protected, Adam Meyerson, editor of Policy Review and a thoughtful observer of the Washington scene, suggested that conservative political leaders express these sentiments out of "prudence"-it is considered political suicide to say otherwise. But such statements are rather transparent fig leaves. Dole, for instance, is on record as proudly reminding Americans that, as a senator, he voted against Medicare as early as 1965, "because we knew it wouldn't work."
Several GOP leaders would favor "dismantling the welfare state." Pronouncements to the contrary add to voters' distrust and cynicism and confuse voters as they try to figure out what the conservative/GOP position actually is. It is high time to move toward one basic position.
Number Five: Lower, but Sound
As I see it, a strong case can be made on both moral and political grounds, for maintaining the public safety nets for one and all, but at lower levels, to supplement the civic fabric and private endeavors. This will ensure their financial viability, reduce disincentives to personal saving, discourage waste in medical resources, and encourage responsible lifestyles. This can be achieved in numerous ways; for example, benefits could be trimmed (i.e., cost of-living adjustments could be adjusted to reality), started at an older age, and treated as taxable income. This would correct, in part, a great deficiency of a system that covers all: It retrieves some of the benefits given to those least in need, without cutting off anybody.
Safety nets should continue to be available, because if the nets are partially privatized the remaining system will cave in for economic reasons (the more costly "cases" will stay enrolled) and political considerations (partial systems have a poor record of public support). Most important, one can never foretell who will be really hard hit, by a combination of losing one's job, having parents who need support, and suffering a prolonged, costly illness. Those who exhaust their resources need a secure place to which they can turn. There is a world of difference from a compassionate viewpoint if only some are covered extensively, in contrast to having all covered by the same or even a reduced level of expenditures. (This is, in effect, what Oregon did when it changed its Medicaid coverage from more coverage of some to less coverage of all the poor).
Those who do not share this line of analysis, or the values it reflects, may still find it worthwhile for political reasons. The talk about privatizing, means testing, and outright shredding of the safety net has exacerbated the anxiety of millions of Americans. If those fears are not responded to, the next Congress may have many more liberals than pundits now expect.
A liberal majority would push the country in the opposite direction, toward more elaborate safety nets, turning them into hammocks, only to provoke a new crisis and conservative backlash at some future election. America would be best served if, as in many European countries, the basic social minimum was removed from the political debate, on the basis of a bipartisan consensus fashioned possibly by a bipartisan commission. Elections could then focus on how low to spin the safety nets and what they should cover, rather than about the fact that they have a legitimate role in a mature capitalist society. There is much reason to believe that this is what the majority of the electorate already demands.
AMITAI ETZIONI is the director of the George Washington University Center for Communitarian Policy Studies and the author of The New Golden Rule: Community and Morality in a Democratic Society (New York: Basic Books, 1997).