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Mailbag: The Social Security theory

A reader e-mails:

It might be helpful to compare this bill to the Social Security Act of 1935, which, when passed, had some really bad elements. Most significantly, the bill excluded domestic and agricultural workers, which meant a large number of poor workers, especially African Americans, were not eligible for retirement or disability benefits. (The provisions were, of course, inserted to get the votes of southern senators who controlled key committees.) It also required people to pay into the bill for several years before seeing benefits.

But subsequent legislation in the 1950s and 1960s expanded those covered to the point that it became a fairly universal component of the American welfare state. Indeed, even Barry Goldwater consistently voted on Social Security expansion in the 1950s Senate. Now today is certainly different in the Senate but Social Security shows that adjustments that broaden existing systems are far easier to pass than the creation of new components of a welfare state.

If this is the end of health care legislation, I too would be dissatisfied. But logically, it can be seen as the second step after medicare/medicaid toward the creation of a broadly universal health care system.

I'll just add that I understand the model in which you don't agree that this bill will expand and improve as it develops its constituency over time. But I don't understand the model by which you believe this bill won't be improved over time but you simultaneously believe reformers can get something better in the foreseeable future.

By Ezra Klein  |  December 21, 2009; 5:02 PM ET
 
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Comments

EZ,

Your response was priceless. We don't like what we have now, but we can get a different result from the same people, if we_________________________ (fill in the blank. Yeaaaaaaaaaah.

Posted by: wshudley | December 21, 2009 5:25 PM | Report abuse

And it's going to reduce the deficit in the long term..........HA

Posted by: fallsmeadjc | December 21, 2009 5:44 PM | Report abuse

This bill has more in common with the 2005 bankruptcy reform than with Social Security. Bankruptcy reform had theoretical benefits for lots of people (lower credit rates, etc.) which mostly failed to materialize. It turned out to be a windfall for creditors. Meanwhile the people who utilize bankruptcy laws got royally screwed. I don't see any return to common sense on this issue. In fact, Obama blocked a loosening of the rules during the stimulus debate, and did so again during health reform. I'm very consistent: I would rather this bill not pass at all and I don't think it will get better over time.

Posted by: bmull | December 21, 2009 7:45 PM | Report abuse

Ezra is right on. Yes, the track record of improving mediocre bills that are passed is only fair. But the track record of defeating mediocre bills and then coming back to pass something better is just about nonexistent. The health care issue is itself the prime example: every time an effort has been defeated, the next round has been with a weaker proposal.

So I'll take my chances with trying to improve what we get--especially since the chances of getting something better after a defeat seem just about zero.

Posted by: dasimon | December 21, 2009 7:55 PM | Report abuse

Social Security does not funnel checks through the private sector for profit skimming. The problem with improving this bill in the future will be the difficulty in taking away subsidies/guarantees for the insurance industry, Pharma and the provider networks to reduce costs. Taking away a business benefit is harder than taking away a citizen benefit. Citizens don't have adequate representation in the system today.

Posted by: slugrunner | December 21, 2009 10:04 PM | Report abuse

And Iraqi reconstruction will be just like Japan or Germany in post-WWII.

OK, reasoning from historical analogy is always a tricky business.

Aside from the fact that we are talking about the expansion of social service spending; let's look at some potentially telling differences:

1. The most glaring difference between the social security and medical insurance reform analogy is that social security was created whole-cloth.

2. In the case of health insurance reform you have deeply entrenched private interests on the verge of crisis, which now will be given a new lease on life to fight against future reforms.

The argument against incremental reform is that:

e.g. as more people get priced out of the private insurance market, private insurers are likely to raise their prices to off-set the increased risk within an insurance pool, which in turn increases prices, which prices more people out of the market. As this happens you are developing a massive constituency that hates the insurance industry; you are also removing money from the insurance sector.

As things get worse, the conditions for more comprehensive reform improves.

Would FDR have been able to enact comprehensive financial reform if the financial sector hadn't been largely leveled from 1929-32?

Even in the case of Medicare; it's a counter-factual argument, so we'll never really know, but one counter is that Medicare for seniors prevented more comprehensive reform, because it reduced pressure for comprehensive reform.

We really don't know exactly what the contours of future reform will be at this stage. There are fair reasons to believe that the near-term benefits will remove some of the long-term urgency. But no one really knows what the future holds.

Posted by: JPRS | December 21, 2009 10:19 PM | Report abuse

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