The Entitlement Trap

WASHINGTON, DC - OCTOBER 26:  A man holds a si...

WASHINGTON, DC - OCTOBER 26: A man holds a sign that reads 'Hands Off Social Security and Medicare' during a news conference at the U.S. Capitol October 26, 2011 in Washington, DC. Members of Congress called on the Joint Deficit Reduction Committee to preserve Medicare, Medicaid, and Social Security benefits when making their decision on cutting the deficit. (Image credit: Getty Images via @daylife)

$202,000.

That’s how much excess Social Security and Medicare benefits a two-income couple with average wages retiring in 2010 will receive beyond the payroll taxes paid during their careers. The figure epitomizes the slow transformation of these twin landmark retirement programs. “What we have,” writes columnist Robert Samuelson, “is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension.” Yet, asserts Samuelson, “millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they ‘earned’ these benefits.”

According to Samuelson, the perpetuation of this vast misconception of Social Security and Medicare as entitlements that have been earned, rather than as welfare programs, inhibits the kind of rational analysis that is required to address the nation’s long-term budget challenges.

He continues, “By all rights, we should ask:  Who among the elderly need benefits? How much? At what age? If Social Security and Medicare were considered ‘welfare’ – something the nation does for its collective good – these questions would be easier. We would tailor programs to meet national needs.  But entitlements are viewed as a higher-order moral claim, owed individuals based on past performance. So a huge part of government spending moves off-limits to intelligent discussion.”

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