Principles Of Government

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Entitlements Always Grow and Grow

By John F. Cogan - Jan. 3, 2022 

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The ‘equally worthy claim’ inexorably prompts further expansion, regardless of lawmakers’ initial limits.

Sen. Joe Manchin’s emphatic “no” to the current version of Build Back Better put the bill on life support. Majority Leader Chuck Schumer, having promised a Senate vote, now must try to maintain the bill’s progressive priorities—including a raft of new and expanded entitlement programs—while shrinking its cost to meet Mr. Manchin’s concerns. A revised bill would almost certainly attempt to disguise the cost of these entitlements by making them initially less-generous. Experience teaches that no matter how slimmed-down the initial provision, an entitlement’s costs grow inexorably over time.
The history of U.S. entitlements is a 230-year record of continuous expansion and liberalization. The first major entitlement, Revolutionary War disability benefits, was initially restricted to members of the Continental Army and Navy who were injured in battle and survivors of those killed in wartime. Eligibility was then expanded, first to state militia soldiers, then to veterans whose disabilities were unrelated to wartime service, and eventually to virtually all people who served during the war regardless of disability.
Civil War disability pensions followed the same liberalization process, except on a far grander scale. Pensions were initially confined to U.S servicemen who suffered wartime injuries and survivors of those killed in battle. Eventually they were extended to virtually all union Civil War veterans regardless of disability. In the 1890s, nearly one million veterans and their survivors were receiving Civil War pensions. Pension expenditures accounted for 40% of federal spending and continued to rise until finally peaking in 1921. That wasn’t the end of it. Benefits were subsequently extended even to a handful of widows of Confederate soldiers.

Congress followed the same liberalizing process with 20th-century entitlements. The original 1956 Social Security disability program limited eligibility to permanently and totally disabled workers 50 and older. Ten years later, eligibility had been extended to temporarily and partly disabled workers regardless of age. When the disability program was enacted, it was expected to cost $1.1 billion in 2000. Its actual cost that year was $56 billion. When Medicare hospital insurance was enacted, cost projections were made to 1990. The projected cost for that year was $9 billion. The actual cost was $67 billion.

The nearby chart makes clear the inexorable growth in entitlement spending and puts the fiscal response to the pandemic into perspective. From the end of World War II to 2019, all—yes, all—of the increase in noninterest federal spending relative to gross domestic product is attributable to the growth in entitlement spending. Defense spending declined after the Korean War. Nondefense discretionary spending shows no appreciable increase. The historic entitlement spending surge in 2020 and 2021 matches the entire increase that occurred during the preceding 50 years.

The seven-decade-long growth of entitlements and the pandemic response are the product of expansionary forces that operate on Congress regardless of who is in charge. Throughout history, the most potent force has been the equally worthy claim. The claim originates from a well-meaning impulse to treat all similarly situated persons equally under the law. Here’s how it works.

When first enacted, entitlement benefits are usually confined to a narrow group of worthy individuals. As time passes, groups of excluded individuals claim that they are no less deserving of aid. Pressure is brought by, or on behalf of, these excluded groups to expand eligibility rules. Eventually, Congress acquiesces.

But the broadening of eligibility rules only brings another group of claimants closer to the eligibility boundary lines, and the pressure to relax qualifying rules begins again. The process of liberalization repeats itself until the entitlement program’s original limited goals are no longer recognizable.

Regardless of how much progressive entitlement programs are slimmed down in a new version of Build Back Better, the equally worthy claim will pressure future Congresses to expand them. How long, for example, will it be before Congress expands income thresholds for daycare subsidies? Not long if the ObamaCare expansions in the House version of Build Back Better are any indication. The original ObamaCare law provided subsidies to families with incomes up to $106,000 in 2021. The House bill proposes to increase those subsidies to families earning $200,000 or more.

Predictions that the eventual cost of a revised Build Back Better will be higher than official government estimates are not mere speculation. Expanding entitlements is a fundamental characteristic of Congress that was baked into its DNA centuries ago.

Mr. Cogan is author of “The High Cost of Good Intentions” and a senior fellow at Stanford University’s Hoover Institution.

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Appeared in the January 4, 2022, print edition.

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