Magic Accounting
From the May 14, 2012, issue of NR.


Moreover, Obamacare’s savings are more likely to be spent twice than realized even once. As Steven Rattner, a former adviser to the Obama Treasury Department, was honest enough to admit in a New York Times op-ed, the government is counting expected savings on Medicare against both the new benefits established by Obamacare and the old revenue shortfalls that were already baked into the Medicare cake.

The thread connecting all such efforts to banish fears about paying the bills we’re running up is the belief that we should be unapologetically militant about defending and enlarging our claims for benefits from the welfare state but serenely complacent about meeting our financial obligations to it. Something — economic growth, a permanently ample supply of young people, experts’ brilliant discoveries about getting more social-welfare bang from taxes that only rich people and big corporations will have to worry about — something will cover the gap between the welfare state’s debts to us and our debts to it. It is indisputable at this late date that liberals have been much more attentive to the political foundation of the welfare state than to its financial one. When hard choices or hard truths about the financial requirements of the welfare state would have compromised their efforts to gain and keep support for its programs, liberals have reliably done and said what is necessary to make social-welfare programs popular rather than what is necessary to make them solvent. These efforts have made the politics of curtailing the welfare state extremely challenging — just like the politics of adequately funding it.

The most direct way to ensure that the welfare state grows more popular as it grows more financially precarious is to extend its benefits to more and more people. Paul Starr, a Princeton sociologist and a co-founder of The American Prospect, explained the rationale in 1991. Liberalism’s domestic-policy objective “should be, above all, to eliminate poverty and maintain a minimum floor of decency to enable individuals to carry out their own life plans.” Though conservatives would interpret and apply the principle differently, it is consonant with Ronald Reagan’s insistence in 1980 that it is “essential” to maintain the “strength of the safety net beneath those in society who need help.” For Starr, however, it is urgent to broaden that agenda in order to fulfill it. Garnering and keeping the political support required to maintain a minimum floor of decency is part of liberalism’s “overall task of constructing democratic majorities. And that imperative will often mean support for programs that provide universal benefits to all groups, including the middle class as well as the poor.” This idea had occurred to the architects and supporters of the welfare state before 1991, of course. It is not by happenstance that, according to the Times’s summary of a recent study by the Congressional Budget Office, the percentage of federal safety-net outlays directed to Americans in the bottom quintile of income distribution “declined from 54 percent in 1979 to 36 percent in 2007.”

The political calculation to make more and more people eligible for more and more government benefits reinforces the administrative logic that constantly works to expand social programs. It will always be the case that households with an income one dollar too large for them to apply for a particular program will be barely distinguishable from the slightly less affluent families who do qualify. The logical response of the gatekeeping bureaucracy is to move the cutoff point to include those who just missed the last iteration. The families one dollar above the new cutoff point will, inevitably, be included after subsequent revisions.

The Times notes, for example, that the maximum income a family can report and still be eligible for the Earned Income Tax Credit was, after adjusting for inflation, 82.7 percent higher in 2010 than when the program was established in 1975. (The 2010 maximum, $49,317, was only $128 less than the median household income that year.) Little surprise, then, that almost half of all American households received benefits from at least one federal program in 2010. Even before the recession, the proportion had grown from 37.7 percent in 1998 to 44.5 percent in 2006.

The facts on the ground, as they have been arranged there and then interpreted by liberals, would place the welfare state in a politically unassailable position. First, make sure that every American stands to receive benefits from at least one and preferably several social-welfare programs. Second, stipulate that the only people with the moral standing to criticize the welfare state are those in line for no benefits whatsoever from it. These premises combine to reduce the ranks of opponents liberals deign to recognize to survivalists living off the grid.


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