It’s hard to tell what course Washington will steer from the actions of the lame duck Congress. The fact that several Republican Senators failed to back an earmark ban (while several of their Democrat colleagues did vote for such a ban) makes one uneasy. But there’s no doubt the new Congress and the old president will have to make some painful budget decisions if the economy is to be revived. An obvious target is entitlement programs.
Throughout recent history, entitlement programs have grown in scope, duration and cost. Though President Clinton, with prodding from a GOP Congress, declared "the end of welfare as we know it," entitlement programs continue to drain the federal coffers. These include Social Security, Medicare, Medicaid, food stamps, federal unemployment insurance, and federal employee retirement programs. We all know that this government largesse is unsustainable, but admitting that fact is considered politically foolhardy.
Such entitlements were initially envisioned as temporary aid for those down on their luck. They have become eternal financial support for a permanent underclass. Every year, the number of recipients goes up, the scope of coverage widens, and the costs multiply. We can no longer afford this wasteful and degrading system. The obvious solution is that these programs must be trimmed, reduced, or eliminated. Here is one method:
All programs that compensate people for temporary setbacks, such as unemployment insurance and food stamps, will follow a "soft landing" approach. That is, current levels of compensation will be maintained for the first month, and then reduced by five or ten per cent each successive month until the benefit ceases entirely. There are no renewals or extensions.
This approach gives the recipient maximum compensation at the point of difficulty, but clearly alters the structure of the entitlement program from an indefinite period of support to a temporary, diminishing and finite system. Rather than paying people not to work, there is a built-in incentive to seek and find work, or to adjust to new circumstances.
Programs that address permanent age-related challenges to the recipient, such as Social Security, Medicare and federal employee retirement plans, would have an opposite schedule. When recipients are youngest, and most able, their compensation would be at the lowest level, and increase five or ten percent each year to the maximum amount. Again, this schedule recognizes that younger recipients are less likely to require aid than older ones. Younger recipients are more likely to still have earned or unearned income to support themselves. The schedule also takes advantage of actuarial realities–each year, the number of recipients is reduced, so that as compensation rates rise, the number of recipients declines.
This simple system recognizes and addresses the need to reduce the cost and scope of entitlement programs, while also giving recipients time to adjust to new challenges and situations. Best of all, it reinstates the American principles of self reliance and individual responsibility which are cornerstones of our nation’s character.
