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Shultz: We have a lot of history that if you order people to do something, it doesn't work out very well. Remember Prohibition?
reason: Yes, but there's also the history of the creation of Social Security and of Medicare, where people can't opt out of paying into the system.
Shultz: When Franklin Roosevelt created Social Security, in his wisdom, he said that the one thing it should not be is a welfare program and that we couldn't afford such an approach. We keep borrowing from the Social Security trust fund—the politicians can't seem to keep their hands off it.
We favor subsidizing existing spending, providing benefits for people 65 years old and older regardless of sex or prior medical conditions. But that's different from saying to you, if you're a healthy 25-year-old, that you have to buy insurance for everything. They want insurance against a catastrophic event—they don't want to cover acupuncture, or wigs, or all kinds of things that make it more expensive. So how do you bring that about? Provide an insurance policy for the 25-year-old that makes sense. I'm 87 years old. I don't want the same policy as a young man; I'm in a different position.
reason: So as a free-market advocate, you think competition would get costs down?
Shultz: If you're mandating things to people, you won't get lower costs.
reason: You and Shoven are at some pains to say you want to preserve the safety net by taking incremental steps.
Shultz: It's incremental, but it's bold—we have a lot of suggestions.
reason: You mentioned President Bush's efforts in this regard, but his attempts at reform came up against a stone wall of resistance.
Shultz: As did President Clinton's. There's a bipartisan recognition that this is a problem that needs to be solved, and a bipartisan recognition of the resistance to solving it.
reason: If the federal government won't do it, what about local communities? What do you think of Gov. Schwarzenegger's and Mayor Newsom's health-care proposals?
Shultz: We know and like them both. The governor's proposal hasn't gone anywhere, so there's no need for me to talk about that. What's interesting about Newsom's proposal is the idea of clinics where ordinary health care needs can be addressed inexpensively.
reason: As you watch the deficit increase—along with the costs of funding the war—is your feeling one of, "A plague on both their houses?"
Shultz: I haven't seen any lack of appetite for more domestic spending programs. The last time anything substantive got accomplished [on Medicare reform] was when two Irishmen [Reagan and Speaker of the House Tip O'Neill], who didn't agree on much else but knew this was a big problem, could get together over drinks and work to help fix it and get the changes through Congress.
reason: You mentioned Prohibition—I know you've taken a somewhat controversial stand for the legalization of recreational drugs.