Entitlement Reform: Don't Count on It


Is entitlement reform really on the table in a "fiscally responsible" Obama White House? That's the big fear I heard expressed on inauguration day when sitting on a Real News Network panel with two journalists to my economic left. But on Sunday, columnist George Will poured a bucket of ice water over any likelihood of that idea, in part by recounting the recent expansionary history of another entitlement, the State Children's Health Insurance Program, or SCHIP:

SCHIP's purpose, when it was enacted by a Republican-controlled Congress in 1997, was to subsidize state governments as they subsidize health care for families too affluent to be eligible for Medicaid but not affluent enough to afford health insurance. Because any measure acquires momentum when it is identified as for "the children," SCHIP was said to be for "poor children" or children of "the working poor."

In 2007, after President Bush proposed a $5 billion increase in SCHIP, the House voted for a $50 billion increase but receded to the Senate's proposed $35 billion, which became the definition of moderation. That compromise, which Bush successfully vetoed, at first would have extended SCHIP eligibility to some households with incomes up to 400 percent of the poverty line (up to $83,000 for a family of four), and more than $30,000 above the median household income ($50,233). So people with incomes higher than most people's became eligible for a program supposedly for low-income people. Call that compassionate arithmetic.

The new expansion, which is vengeance for Bush's veto, is mission gallop: It will make it much easier for some states to extend SCHIP eligibility to children from families earning up to $84,800. Furthermore, to make "poor" an extremely elastic concept, generous "income disregards" are allowed. Families can, depending on their state's policies, subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation or some combination of these. So children in some families with incomes well over $100,000 will be eligible.

Perhaps more importantly, as Will also notes, the Bush/Obama bailout/stimulus has dwarfed all such numbers to the point that complaining about them seems either irrelevant or just plain mean:

A nation in which $350 billion was but the first half of the Troubled Asset Relief Program and in which TARP is distinct from the perhaps $825 billion "stimulus" program, is a nation being taught not to take seriously sums with merely nine digits and two commas. Remember, just 15 months ago Bush vetoed SCHIP because of $30 billion, a sum that, from the TARP bucket, nowadays disappears into the thin air from which much of the almost $1 trillion of stimulus will be conjured.

Reason on SCHIP here.

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  1. A trillion here, a trillion there, pretty soon you’re talking about real money . . .

  2. I’m already pining for the days of our “spendthrift” GOP majority. Remember them?

  3. Won’t someone PLEASE think of the children?

  4. Is entitlement reform really on the table in a “fiscally responsible” Obama White House?

    Seriously, who thinks this will be anything but a massive tax hike? Democrats are going rein in the difference between actuarial rates and SocSec/Medicare growth? Ha.

  5. Will SCHIP inflate wages so that more nurses will enter pediatrics so that none are available anymore to clean our ailing grandparents?

  6. Seriously, who thinks this will be anything but a massive tax hike?

    Who here actually cares? This is for our nation’s progeny, Dave. Fall in line or pipe down. We’re trying to muster up a bipartisan agreement, here. Do you not want change? Do you despise hope?

  7. Every day that goes by makes me ever more happy that I chose not to have children. Hope your kids enjoy being wage slaves, suckers!

  8. Will thinks families making $100k don’t need SCHIP?

    Does he know how much six cell phones, six Jonas Brothers tickets, six Wii nunchucks, and a five-bedroom house costs?


  9. You guys need to fall in line and support the “new era of responsibility”.

    Which of course, actually means you should consider yourself responsible to eagerly support ever expanding socialism.

    Nothing says responsibilty like getting over 50% of the population hooked on all sorts of entitlements and not paying any income taxes.

    You see, responsibilty actually means absolving the majority of the population from the responsibilty for paying for their own healthcare, their children’s healthcare, their education, their retirement, the food they eat, the oversized and overexpensive house they foolishly bought, etc. etc. etc.

    Irresponsibilty is actually the new responsibilty.

    You must embrace this or you are threatening our new “unity of purpose”.

  10. We already receive SCHIP benefits for our children.What is in the new bill for people like us?

  11. Lobotomies for everyone!

  12. No, P Brooks, you’ve got it wrong:

    Lobotomies for some, and…crap, I don’t remember the rest. It was from that Simpson’s Halloween special around the ’96 election.

  13. Lobotomies for some, and

    government checks for everyone else?

  14. Scary:

    “Grace-Marie Turner, a student of health-care policies, says this SCHIP expansion is sensible — if your goal is quickly to get as many people on public coverage as possible and to have children grow up thinking that it is normal for them to get their health insurance from the government. That is the goal.”

  15. Is it just me, LOL or am i the only one who thinks the tax system is bassackwards. you have to pay LESS taxes if you reporduce and raise little fund suckers. but if you are responsible. have no kids, pay everything on time, you still pay higher taxes to pay for all the rugrats running around. The non breeders should get tax breaks, not people with children. the way it is now, the better you do for yourself, the more you pay for others kids. thats just fucked up!

  16. SpongePaul,

    Actually, it’s like a big pyramid scheme. See you need to encourage the birth of new tax sources — you need to keep bringing in fresh revenue to pay back the initial investors…

  17. Like SpongePaul, I’m childless and resent the breaks for the breeders. But as Taktix says, we’re actually hurting the whole system by not signing up any new salespeople. Sure, we’re moving product, but that’s only good for you in a real business, not a pyramid scheme.

  18. Looks like we qualify for SCHIP with scads of room to spare.

    Although I’m paying $500 a month to insure my family, and it hurts, I’m not about to go letting the government anywhere near(er) my babies.

    It’s bad enough we’re enrolled in First Steps.

  19. One of the main reasons I hated the bailout. it was obvious that if we were going to blow $700 billion bailing banks out that it would become a justification for every other social welfare program that the Democrats have been trying to ram through for years.

  20. OBL(Old Bull Lee, not Osama Bin Laden…)

    I saw a quote somewhere that basically said that to change a paradigm, one shouldn’t try to change the minds of the non-believers. The best way to get people to change the way they think is to get to them early, and let the non-believers die off. It takes longer, but you get less resistance.

    The problem that this whole Socialist movement is going to create will happen when we run out of money to fund these entitlements. And don’t doubt that it will happen. If you’ve got your voting bloc stuck on your largesse, think how quickly they will turn on you when the checks stop coming. Have you ever met a reasonable mooch? I thought not.

  21. Silentz – I had a discussion with someone recently about that very thing. Having the government take care of us is becoming closer to the default. It reminds me of what de Tocqueville wrote when visiting here: there was so much volunteerism and individualism that most public services weren’t needed. Quite the opposite now (e.g. Katrina).

  22. I don’t see a problem with this. If we’re going to hand over a gigantic national debt to our children, they may as well get some of the money now.

  23. I came here to say exactly what torpid already said.

    “Lobotomies for some, and…crap, I don’t remember the rest. It was from that Simpson’s Halloween special around the ’96 election.”

    Miniature American flags for the rest.

  24. Grace-Marie Turner is the president of the “Galen Institute”, a right-wing thinktank on healthcare issues funded by the usual suspects, Olin and Scaife and the rest of them.

    It’s classy of Will to quote her simply as “a student of health care policies”.

    But she has a good point:
    Expanded SCHIP->makes kid healthy->kid votes for Democrats.

    No SCHIP expansion->kid dies->kid DOESN’T vote for Democrats, or anybody else.

  25. No SCHIT expansion->kid dies->$$profit$$.

  26. Why, yes, DannyK, I was just telling the chaps at the club what a big problem tripping over the bodies of dying children has become.

  27. “Lobotomies for some, and miniature American flags for the rest.”

    It’s scary how accurately that still describes the political spectrum.

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