How Means Testing Exploits Well Intentioned Liberals

Means testing of Social Security or Medicare is a bad idea.  It doesn’t generally save that much money and it undermines the very logic of social insurance–universal coverage paid for by dedicated taxation, thereby spreading risk over the whole population, protecting everyone.  Means testing is a way of welfarizing social insurance, that is, associating it with the poor (read : undeserving)  Most people, even politically active people, don’t understand the idea of social insurance, either its policy or political logic.

That said, I’ve found the idea is one that many liberals seem drawn to.  I’m not talking about neoliberals who are really skeptical of social insurance. I mean people who are primarily concerned with inequality, who have no ideological skepticism toward government. And I don’t mean the politicians and think tanks that are pushing it.  I mean why people think it sounds like a good idea.

The answer hit me earlier today.  Means testing as a cut strategy exploits liberals’ good intentions.  This works at two levels.  First is the belief (correct in my view) that the rich already are getting way too many of the rewards in our society, that inequality is a serious problem, and therefore it would be better to place a slightly greater burden on the rich, rather than people at the bottom if pain is going to be dished out. (It’s also standard for liberal thinking to not ask if pain needs to be dished out at all, but that is a separate matter.)

The second level is more personal.  The good liberal says ‘I’m privileged, I can pay more, better that then cutting benefits for others’.  It’s an understandable sentiment.  But disastrous.

Aside from what I’ve already said, it is based on the notion that the problem is actually about the deficit and that the politicians who are pushing schemes like means testing or raising the retirement age or whatever are seriously concerned about it.  But they aren’t. If they were, we’d be talking about raising the cap on the Social Security payroll tax, or adding a Tobin tax that would contribute to the trust funds.  There are plenty of ways to save money in Medicare that don’t involve benefit cuts.  And of course, if we had full employment and less inequality, it would mean more money going into these programs.  Remember that both parties are arguing over which Bush tax cuts to keep–the difference between the parties is whether it should be some or all of the cuts.  These are not the actions of people who care about deficits.

If you care about these programs, if you care about inequality, resist the idea of means testing.  We are all in this together, and we need programs based on that idea if we want them to survive.

[Update]: For some related thoughts from the other side of the pond, see this post: In praise of universal benefits. It has some more to say on the logic of social insurance.

Beveridge’s arguments in favour of universal benefits – ease of access, fairness, and the sense that a decent sufficiency is a matter of right, with state support as an expression of people’s membership of an inclusive civil society – have not changed.  We just appear to live in a society that no longer values those things; and appear no longer to be repelled by the use of cuts in living standards for the most vulnerable as an economic strategy.

Certainly our elites no longer do, although I think the populace, both here and in Britain, do.  Whether they will fight for it is a separate question.