generational conflicts in u.s. social policy usw 31, november 12, 2012 theda skocpol
TRANSCRIPT
GENERATIONAL CONFLICTS IN U.S. SOCIAL POLICY
USW 31, November 12, 2012
Theda Skocpol
• Social divisions in the 2012 election – the prominence of the age divide
• Quick overview of the development of Social Security and current disputes about its future
• Why battles over Affordable Care and Medicare are even bigger flashpoints
• Election 2012 again: why did those benefitting most from existing social programs support the candidate who wanted to cut social spending?
Age Groups Voting for Obama and Romney in 2012
0%
10%
20%
30%
40%
50%
60%
18-29 yrs 30-44 yrs 45-59 yrs 60+ yrs
ObamaRomney
SOCIAL SECURITY ACT of 1935
• National system of Old Age Insurance (“Social Security”) funded by payroll tax on employers and employees.
• Federally required, yet state-administered unemployment insurance programs, funded by taxes on employers. States determined taxes and benefit rules and levels.
• Federally subsidized, state-determined and administered public assistance (“welfare”) programs for the needy elderly, for the blind, and for very poor children. States could set benefit levels and many rules for eligibility.
For two-thirds of a century after adoption of the SOCIAL SECURITY ACT of 1935, debates about public social programs remained largely within its framework:
arguments about “welfare” programs for the very poor -- especially families with children
arguments about expanding, then “privatizing” “Social Security” insurance programs that primarily address the needs of elderly retirees
Political debates about welfare in the 1990s increasingly reflected a new societal consensus that even mothers of young children should work for wages.
Source: David Ellwood
As the federal government pulled back from guaranteeing cash welfare, non-cash federal benefits expanded, especially the Earned Income Tax Credit (EITC).
This was especially true during the Clinton administration --which vowed to “Make Work Pay.”
Welfare/support for poor continues to be debated:
• Most Republicans call for tougher work requirements (40 hours a week, instead of 30, with no minimum wage for public service jobs); and they promote increased federal subsidies for “marriage counseling.” Emphasize “personal responsibility.”
• Democrats want participation in educational programs to count -- and argue that federal and state expenditures for child care and health care must be sharply increased to support poor “working families.” Paid Family and Medical Leave is also a goal for many liberal advocates.
• Many poor on TANF face the five-year limit for federally subsidized cash benefits. Poverty has increased, especially in economic recessions and among poor women and men unable to work or find private employment.
“Social Security” debates, in contrast to “welfare” debates, have focused since the 1980s on what to do with an expensive and successful program for an aging population.
Social Security Wage Replacement Rates for Workers Age 65, January 2004
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Low-wage earner Average-wage earner Maximum-wage earner
Pe
rcen
t o
f w
ag
es r
epla
ced
Source: The Century Foundation, Social Security Reform (2005), Figure H, page 14, statistics from Social Security Administration.
84.8%
62.9%
44.6%
Social Security and Elderly Poverty, 1999
8%3%
15%7%
21%
40%
37%
42%
40%
40%
0%
10%
20%
30%
40%
50%
60%
70%
TotalBeneficiaries
Married Nonmarried White Black
Per
cen
t o
f el
der
ly
Poor even with Social Security Kept out of poverty with Social Security
Source: The Century Foundation, Social Security Reform (2005), Figure F, p. 11.
Social Security taxes are a rising proportion of federal revenues -- also the biggest taxes on ordinary Americans -- as the income tax has been cut and rendered less progressive.
Percentage of Households Whose Payroll Taxes
Exceed Their Income Taxes, 2001
The hearts and minds of younger Americans are the battleground for those trying to shape public opinion -- and votes -- about the future of Social Security.
Debates over Social Security’s future – and Medicare’s future -- tend to highlight possible divergences of interest between generationally defined slices of the American population.
Since the late 1980s, many publications have featured stories about the increasing burden Social Security and Medicare will supposedly place on the young.
Critics stress that fewer workers will be available to support a projected growing population of retirees. (Better counting of illegal immigrants, or shifts in immigrant flows, could change these ratios, however.)
The picture is different if children are also considered…
Projected Total and Elderly Dependency Ratios across Industrialized Nations, 2035
0
10
20
30
40
50
60
70
80
90
UnitedStates
Japan Germany France Italy UnitedKingdom
Canada
Dep
end
ents
per
100
ind
ivid
ual
s o
f w
ork
ing
ag
e
Elderly Child
Source: The Century Foundation, Social Security Reform (2005), Figure M, page 26, based on U.N. statistics.
REFORM OPTIONS FOR SOCIAL SECURITY
• Adjust system by finding new sources of revenue, or trimming promised benefits, or a bit of both.
• Privatize the system by moving toward primarily or entirely government-regulated individual Wall Street accounts.
• Enhance benefits in Social Security to let it do more to help working-aged families – for example with caregiver benefits charged against retirement age.
Additional Years of Life Expectancy for American Men at Age 65
15.016.116.5
21.5
0.0
5.0
10.0
15.0
20.0
25.0
1982 2006
Exp
ecte
d y
ears
bey
on
d a
ge
65
Bottom half earnings
Top half earnings
Source: Economic Policy Institute, Briefing Paper #273.
What about raising the retirement age?
79%
75%
79%
78%
72%
84%
77%
69%
67%
77%
5%
11%
7%
13%
18%
4%
11%
17%
20%
10%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
$0-30K
$30-50K
$50-75K
$75-100K
$100K+
Democrat
Independent
Republican
Tea Party ID
All
Cut benefits
Raise payrolltax (lift cap)
"Currently, workers pay social security payroll taxes on up to $106,800 of their salary. To ensure the long-term viability of Social Security, would you rather have people pay social security taxes on salaries above $106,800, or would you rather see benefits cut and the retirement age increased to 69?"
Source:Public Policy Policy for Kos, conducted January 20-23, 2011.
If U.S. social provision is uneven across generations, it could become more balanced either by cutting Social Security or by enhancing public supports for working-aged families. Various proposals to adapt to new realities of work and family life include:
•EXPAND SOCIAL SECURITY to include additional risks that working-aged families routinely face.
•SUBSIDIZE CHILD CARE for all working families -- through payments to providers, or refundable tax credits to parents.
•ENACT PAID FAMILY AND MEDICAL LEAVE (building on 1993 U.S. unpaid leave; or enact new programs in the states)
•BOOST LOW WAGES -- expand the Earned Income Tax Credit and/or raise minimum wage
•Require employers to give proportional BENEFITS TO PART-TIME WORKERS
•Conservatives still prefer TAX CUTS -- to let families “keep their own earnings”
Cuts in guaranteed Social Security would almost certainly INCREASE INEQUALITY in the United States -- for both economic and political reasons:
• Lower- and middle-income Americans would lose relatively generous guaranteed, lifetime Social Security payments -- and they are more dependent on those payments.
• Under partial privatization, privileged Americans would pressure Congress to expand tax diversions to private accounts -- then their taxes would no longer go to subsidize pensions for the less-well-to-do.
• Privatization would unleash constant political quarrels over how to regulate the Wall Street accounts -- which would increase business lobbying pressure on Congress.
• Individual political participation by the elderly would become more class-unequal, because Social Security struggles now induce more participation from the less-privileged elderly.
U.S. Health System: expensive, but many low-income working aged families lack affordable health
insurance – a situation the Affordable Care Act of 2010 promises to rectify
Source: SCIENTIFIC AMERICAN (April 1999), p.36.
The U.S. health care system has very high -- and steeply rising -- costs.
Health Insurance Coverage in the U.S., 2009
NOTE: Includes those over age 65. Medicaid/Other Public includes Medicaid, CHIP, other state programs, military-related coverage, and those enrolled in both Medicare and Medicaid (dual eligibles). SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on the Census Bureau's March 2010 Current Population Survey.
Total = 303.3 million
Uninsured Nonelderly vs. All Nonelderly,by Family Poverty Level, 2009
50.0 Million 264.7 Million
Under 100%
100% - 199%
200% - 399%
400% +
NOTES: Data may not total 100% due to rounding. The Federal Poverty Level for a family of four in 2009 was $22,050 (according to the U.S. Census Bureau’s poverty threshold). Family size and total family income are grouped by insurance eligibility. SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of 2010 ASEC Supplement to the CPS.
HOW DID THE UNITED STATES DEVELOP THIS KIND OF HEALTH CARE SYSTEM?
Campaigns for government-subsidized and publicly guaranteed universal health insurance coverage repeatedly failed in the 20th-century United States.
Government and private institutions ended up subsidizing employer-provided private insurance, the construction of acute-care facilities, and high-tech medicine.
Private, fee-for-service physicians carved out a place for themselves as the key actors in an intricate institutional system. This persisted until recent times.
Decrease in Employer
Sponsored Insurance
(million)2.8%
National Unemployme
nt Rate Increase
since 2008(from 7.2% in
Dec-08 to 10.0% in Nov-09)
=
2.8 3.0
Medicaid /CHIP
Enrollment Increase(million)
Uninsured Increase(million)
&
6.9
Note: Totals may not sum due to rounding and other coverage.Source: Based on John Holahan and Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured, prepared for the Kaiser Commission on Medicaid and the Uninsured, January 2009.
Impact of the Rise in Unemployment on Health Coverage, 2008 to 2009
Patient Protection and Affordable Care Act of 2010
• New rules of the game for insurance companies: make profits, but must serve more patients, better; cannot exclude sick people or those expected to become sick.
• Make insurance available affordable for most Americans: expansions of Medicaid and new subsidies for small businesses and lower and lower-middle income people to buy plans.
• Each state (or compact of states) establishes a regulated insurance exchange, on which plans are listed and can be compared by potential purchasers.
• Improvements in basic Medicare coverage, but cuts in high-end plans and slightly higher taxes for richest beneficiaries.
• New coverage for young people: parental insurance until age 26; expansions of Medicaid and subsidies to buy private plans.
Affordable Care Act passed March 2010 – but the battles have continued
challenges in the courts.
resistance from Republican governors who do not want to expand Medicaid – Supreme Court decision in 2012 allows governors to refuse expansions.
business interests playing both sides.
public opinion remains divided, but people like the specifics.
Affordable Care was central in the 2012 election, and it has now survived.
Uninsured Rates Among Nonelderly by State, 2008-2009
<14% Uninsured (13 states & DC)
14 to 18% Uninsured (20 states)National Average = 18.1%
SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of 2009 and 2010 ASEC Supplements to the CPS., two-year pooled data.
AZ
WA
WY
ID
UT
OR
NV
CA
MT
HI
AK
AR
MS
LA
MN
ND
CO
IA
WISD
MOKS
TN
NMOK
TX
AL
MI
ILOH
IN
KYNC
PA
VAWV
SC
GA
FL
ME
NY
NH
MA
VT
NJ
DE
MD
RI
DC
CT
>18% Uninsured (17 states)
NE
High Stakes for Health Care in 2012 – and Generational Tensions
• Elderly beneficiaries of Social Security and Medicare most opposed to Obama and Democrats.
• Tea Partiers feared cuts in Medicare to pay for Affordable Care.
• Romney-Ryan promised drastic restructuring of Medicare, but only for those under age 55. Obama gained some additional trust on Medicare during the campaign, which may have blunted his losses among older voters.
• Young people, Latinos, and single mothers support Affordable Care more than other groups – and stand to benefit from it. They supported Obama overwhelmingly in this election.
To learn more about Social Security, Medicare, Medicaid, including public opinion and policy
options – See the many two-page briefs on the SSN website at
<http://www.scholarsstrategynetwork.org>