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December 10, 2012 1:10 PM Goosing the Means-Testing Ghost

By Ed Kilgore

We are led to believe that another non-negotiable congressional Republican demand at the center of the big fiscal talks is “means-testing” of Social Security and/or Medicare. This has become quite the mantra for Republicans. Means-testing Social Security benefits was one of the few unchanging policy positions Mitt Romney maintained during the 2012 cycle. Means-testing entitlements generally was articulated as the very definition of “entitlement reform” by Mitch McConnell in an interview with the Wall Street Journal immediately after the elections.

But can anyone tell you with any degree of precision what Republicans currently propose by way of supporting “means-testing?” To some extent, that bridge has long been crossed, so it shouldn’t be a matter of some big principle being vindicated. Social Security benefits are already means-tested by the pay-out formulas—and by the exposure of benefits to income taxes, which has been in place since 1993. And depending on how you look at it, so are Medicare’s, insofar as Part B and Part D premiums vary according to income. So what’s the big Republican idea? A little more along the same lines, or something more drastic? Hard to say, isn’t it?

There are also aspects of means-testing that make it a very implausible conservative policy initiative. The Right has complained for years that means-tested programs for the poor undermine work incentives. As Kevin Drum has pointed out, means-testing retirement programs could create lifelong disincentives to higher incomes and savings. And more modest means-testing wouldn’t save a lot of money (which should be evident in the fact that so many people don’t even know it already exists). In citing this “reform” as a sort of first principle, GOPers are really goosing a ghost.

So you got one “essential entitlement reform” that makes no sense and nobody likes (increasing the eligibility age for Medicare) and another that no one can quite describe. Throw in paring back cost-of-living adjustments for all federally provided benefits, which is guaranteed to infuriate many millions of people, and you’ve got quite the “reform” package.

I’ve said a lot of contemptuous things about Republicans over the last several years, but their degree of disarray right now exceeds anything I might have anticipated. And to think: if the elections had turned out differently, they might all be focused with amazing unanimity and specificity on enacting the Ryan Budget. Elections do have consequences.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • jjm on December 10, 2012 1:14 PM:

    They probably mean that they want to take these things AWAY from poor people: "means testing" the poor because they are irresponsible with money, since by definition they aren't wealthy enough to have any money in their hands... the GOP makes me sick.

  • c u n d gulag on December 10, 2012 1:28 PM:

    Republicans put the "mean" in "means testing."

    Not only didn't their "fever" break, they're chewing on the feckin' thermometer.
    Who knew assholes had teeth?

    They don't just want a pound of flesh - they want a limb.

    To call them "reprehensible" is an understatement.

  • paul on December 10, 2012 1:35 PM:

    The GOP has been campaigning for years on the false claim that Social Security won't actually be there when the next generation retires. This is another chance for them to make that dream come true.

    And once they manage to make social security and medicare less attractive to the middle class (by additional means testing or whatever other tricks occur to them) then making sure the poor don't get it either will be a no-brainer. The whole point of these programs is that everyone benefits, and that's what makes the current GOP so livid.

  • IntellWriter on December 10, 2012 1:36 PM:

    Whatever it means, it's a bad idea. It will turn an earned benefit into a welfare program. This will make people with higher income and higher savings balk and rightly so. When the programs were first implemented, the idea was that everyone would be in it equally thus keeping the compact with all of society.

    The key to "earned benefit" reform is to go after underlying costs. Until costs are fundamentally brought down, it almost doesn't matter what else they do.

  • golack on December 10, 2012 1:37 PM:

    Alan Simpson was on a Sunday talk show going on about how these people get $200K heart surgeries and don't have to pay anything...

    Just saying...

  • Daryl McCullough on December 10, 2012 1:40 PM:

    The real point of favoring or opposing means testing is to try to manipulate support for entitlement programs. If Social Security and Medicare are programs that everyone benefits from, then they enjoy a popularity that acts as a brake against efforts to reduce or eliminate them. On the other hand, if these programs are means-tested, then they will tend to be lumped into the category of "welfare" in people's minds, and unfortunately, people don't fight very hard for programs that they don't personally benefit from.

  • Daryl McCullough on December 10, 2012 1:43 PM:

    Just to add to what I said: in general, Republicans have an incentive to make government programs unpopular. So the fact that means-testing will cause resentment is all good, as far as they are concerned.

  • Vadranor on December 10, 2012 2:24 PM:

    Taxation of SS benefits did not begin in 1993, rather it was part of the recommendations of the Greenspan Commission that was enacted into law and signed by Ronald Reagan. What happened in 1993 is that Clinton increased the amount of benefits subject to tax.

  • Andy Hall on December 10, 2012 2:39 PM:

    The simple way to head this off is to explicitly demand that any entitlement reform be made retroactive to current recipients, as well as those who come later. Raise the retirement age by two years? Fine -- cut off benefits for two years for those who are already collecting them. Means testing? Fine -- means test the oldsters living on the edge of the 18th green at the country club, too.

    I've put in three decades of paying into Social Security and Medicare, subsidizing those on it now, under the promise that it would be there for me when my turn came. If those programs are going broke, it's not because I and the rest of Romney's 53% have been feeding at the trough of government entitlements.

    Everybody needs to pay, not just those who happened to be born after a certain date.

  • Ryan Seacrest on December 10, 2012 2:55 PM:

    Uncapp FICA!!!!

  • golack on December 10, 2012 3:38 PM:

    Ryan's right--but uncap in on the payroll (employer) side, not the employee side. Use the new revenue to lower the overall rate a little bit, but with an increase in Medicare/Medicaid tax. Net effect is little change in taxes for most everyone--only those corporations who pay out huge sums to CEO's, etc., and those CEO's, etc. will be hit with an increased overall tax bill. This also starts to right size the tax rates for social security vs medicare/medicaid and targets the distorted income distribution.

  • Bob h on December 10, 2012 3:39 PM:

    If the well-to-do have to pay more for their benefits and get the feeling they are not getting a fair deal, heir allegiance to the programs may wither. And that will undermine political support for the programs.

  • exlibra on December 10, 2012 3:40 PM:

    I, myself, am very much for "means testing" for Social Security. Just not at the pay-out end, which seems to be the only thing the Very Serious People ever talk about. Let's "means test" it at the *pay-in* end -- you got the means, you pay in, on your entire income, not just on the first $107 (or thereabouts) thousand. Or, as Ryan Seacrest said, @2:55PM: uncap FICA!

  • paul on December 10, 2012 4:35 PM:

    I like the idea of starting by uncapping the employer contribution. That would give us a good sense of just how much those astronomical salaries are actually being earned.

  • Tired Liberal on December 10, 2012 5:45 PM:

    Raising the Medicare eligibility age to 67 would cost everyone money and increase the total amount of our GDP the country spends on health care, a figure that is already higher than any nation on earth. Current Medicare recipients would see their rates go up because the healthiest people in Medicare are the 65 and 66-year-olds. Everyone on regular health insurance would see their premiums go up because the 65 and 66-year-olds would be the sickest people in that group.