Magazine article Insight on the News

Who's Entitled to Our Cash?

Magazine article Insight on the News

Who's Entitled to Our Cash?

Article excerpt

President Clinton has proposed his national cradle-to-grave health care plan at a unique time in history - the exact moment when the rest of the world's industrialized societies are valiantly, even desperately, trying to rein in their welfare states.

Washingtonians have never been comfortable with the subject of entitlements. They talk about programs, needs, crises and money. But they never answer, or even ask, the obvious questions: Who should be entitled to what, how much and why?

Western Europeans, burdened with the crushing financial responsibility of providing an endless stream of entitlement benefits, not only have begun to ask these questions, but also have come up with some answers that might surprise Washington, enamored as many of them are with the "progressive" policies of quasisocialist welfare states.

In the Netherlands, for example, the Dutch are planning to save $2 billion by narrowing the definition of "disability." Currently, nearly 1 million people, or 18 percent of the country's work force, receive disability pay - many for ailments as trivial as job-related stress.

And that's just the beginning. The French are cutting back on jobless, retirement and medical benefits; the Germans are trimming unemployment benefits; even the Swedes, whose policies America's intellectual elite consider the very definition of enlightened socialism, are cutting back on entitlements, beginning with their generous pension system.

Only the United States is moving sharply in the opposite direction. As former presidential candidate Barry Goldwater once said, "Any government big enough to give you anything you want is big enough to take everything you have." But what is it that Americans want? And what is it that we have?

When most Americans think of "entitlements," they think of welfare programs for the poor. There's no question that welfare spending has been massive: $5.1 trillion since the "War on Poverty" began in 1964, or more than the entire cost (in constant dollars) of battling Germany and Japan in World War II. Yet what's amazing is that programs designed specifically for low-income Americans - food stamps, Aid to Families with Dependent Children and Medicaid - form only the tip of the entitlement pyramid.

Most entitlements are "non-means-tested," meaning a corporate tycoon may be just as eligible for benefits as an unemployed mother. These non-means-tested programs account for 79 percent of entitlement spending and consume 41 percent of the annual federal budget. Three of them alone consumed nearly $500 billion last year: Social Security cost $300 billion, with 40 million beneficiaries; Medicare cost $116 billion, with 35.5 million beneficiaires; and federal civil service and military retirement benefits cost $68 billion, with 3.3 million beneficiaries.

While retirement benefits are the largest entitlement programs, they are by no means the only ones. Among the many other Americans "entitled" to something:

* Students. Under the Stafford loan program, for example, college and graduate school students can get student loans at below-market rates. If a student defaults on a government-backed loan, the government (read: the taxpayer) is left holding the bill, as happened to the tune of nearly $3 billion in 1992. …

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