Of Private and Public Safety Nets

By Monheit, Alan C. | Inquiry, Spring 2011 | Go to article overview

Of Private and Public Safety Nets


Monheit, Alan C., Inquiry


If any doubts remain regarding the necessity for health reform or for an enlightened and judicious process of addressing our social insurance and safety-net spending, one only has to observe our increasingly frail private, employment-related safety net and the tenuous employment circumstances that have characterized the last two decades. Once a critical component of middle-class economic and health security, the private safety net--consisting of employment-related health insurance, retiree health coverage and pension benefits, paid sick leave, and other valued work-related benefits--has developed gaping holes that are unlikely to be repaired in the foreseeable future.

As of this March writing, we are slowly emerging from the dismal employment prospects brought about by the Great Recession. While February's decline in the unemployment rate to just below 9% and the addition of 192,000 private-sector jobs are causes for optimism, the changing nature of employment contracts, employer commitments to job-related benefits, and the types of jobs the newly employed are likely to acquire should give us pause. At issue are whether many middle-class workers will acquire and continue to hold jobs that will yield both economic and health security.

As many families face continued uncertainty regarding their economic prospects, and as we await the nearly full implementation of health reform in 2014, Congress is going through its annual ritual of budgetary posturing, with each side making efforts to demonstrate its fealty to sound fiscal principles, not to mention valued political constituencies. With a budget gap of $1.5 trillion in 2011 and $1.1 trillion for 2012--9.8% and 7% of gross domestic product (GDP), respectively--and with public spending on Medicare and Medicaid, Social Security, and national defense the key contributors to this shortfall, Congress for now largely has avoided these substantial budgetary expenditures and the consequences of alienating critical political support. Instead, it has homed in on the relatively small component of the federal budget that is related to non-defense discretionary spending and which makes up less that a fifth of its total. At the same time, critics of health reform persist in their efforts to derail "Obamacare" while offering no viable reform alternative for coverage or cost containment, and exhibiting little response to the president's offer to states to waive some of the formal requirements of the Patient Protection and Affordable Care Act (ACA).

It is difficult to take seriously claims that we are at the day of fiscal reckoning when the best that some lawmakers can propose is to sharply curtail funding for such "big ticket items" as Head Start, Child and Maternal Block Grants, the Women, Infants, and Children (WIC) nutrition and health program, the Corporation for Public Broadcasting, the Legal Services Corporation, and Planned Parenthood. Add to this the sentiment voiced by some Republican governors that the way to address their revenue shortfalls is to curtail the ability of public employee unions to engage in collective bargaining. With most federal and state legislators unwilling to consider new sources of "revenue enhancements," even from small income tax increases on their most affluent citizens, there is reason to be concerned that the budget crisis is being used to support partisan ideology and to assault long-standing political targets. Such responses also reflect the deep chasm that exists between the "haves" and "have-nots" regarding the value of the public safety net and public amenities and the willingness to pay for such services by those fortunate enough to have access to the private safety net. With the recent recession demonstrating that even top earners are not immune from personal economic catastrophe, those unwilling to support the public safety net are misinformed at best and myopic at worst.

In what follows, I draw attention to our deteriorating private safety net of employment-related benefits, explore the implication for our health and financial security, and emphasize the importance of assuring adequate funding for our public safety net and social programs. …

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