Beto O’Rourke has been doing a lot of apologizing since entering the race for the Democratic presidential nomination just days ago. Among other things, the former Texas congressman has expressed regret for having made light of his negligent parenting, for the extent to which he had benefited from “white privilege,” and for having penned a gruesome murder story as a teenager. Given the mood of the Democratic Party’s activist base, however, I suspect all these will be considered venial sins in comparison to the fact that he once flirted with entitlement reform.
While O’Rourke’s exploits as a teenage hacker could be dismissed as youthful mischief-making, The Wall Street Journal reports that he called for raising the Social Security eligibility age and means-testing federal entitlements as recently as 2012, when he was in his late 30s, old enough and wise enough, presumably, to have reached a considered judgment on such important questions of public policy.
Recall that O’Rourke was hardly alone among Democrats in championing entitlement reform during the Obama years. President Barack Obama, for one, had on several occasions called for restraining the growth of Social Security benefits, and the Affordable Care Act, his signature legislative achievement, introduced a series of new cost-control mechanisms designed to keep Medicare spending under control.
Of course, this is not news to those on the left who favor increasing Social Security benefits, an idea that now commands considerable support among Democrats in Congress, or who’ve condemned the White House for outlining a series of reforms that would reduce future Medicare spending, many of which were first proposed by the Obama administration. Whereas Democrats in the Obama era felt obliged to at least gesture toward fiscal rectitude, Democrats in the Trump era are increasingly convinced that doing so is at best a politically profitless undertaking. By 2018, O’Rourke had joined 150 of his Democratic colleagues in the Expand Social Security Caucus.
But the truth is that O’Rourke’s younger self was right on the merits. There really is a rock-solid egalitarian case for preventing old-age entitlements from gobbling up an ever-larger share of federal spending, and if O’Rourke hopes to build his presidential candidacy on something more than his supposed Gen X magnetism, he ought to consider making it while his many rivals race leftward.
As of now, the U.S. federal government devotes far more spending to the old than to the young. Eugene Steuerle, a scholar at the Urban Institute, estimates that federal subsidies per child are roughly one-sixth the level of subsidies per senior citizen, and federal benefits for children are set to decrease over time. This is despite the fact that 45 percent of infants and toddlers in the United States live in households with an income below 200 percent of the federal poverty level, a low-income share substantially higher than among the elderly.
Redressing this imbalance is a perfectly legitimate policy objective, and a number of proposals, such as the American Family Act recently introduced by Senators Michael Bennet and Sherrod Brown, aim to do just that. But Bennet and Brown are largely silent on the small matter of how they would finance their generous new child benefit. Unless we’re willing to contemplate drastic middle-class tax increases, and not just the boutique taxes on the ultrarich that are all the rage among Democratic politicians wary of alienating their upper-middle-income constituents, the only fiscally sound way to increase spending on the young will be to contain the growth of old-age entitlement programs. In other words, O’Rourke’s heretical thoughts about Social Security and Medicare are perfectly compatible with his professed desire to boost public investment in America’s younger generations.
Entitlement reform needn’t mean abandoning the federal commitment to protecting the elderly from poverty. Social Security in its current form leaves large numbers of older Americans out in the cold. Only those with 10 years or more in formal employment are eligible for any benefits at all, which excludes a not inconsiderable number of Americans with sporadic attachment to the labor force. Moreover, Social Security benefits are tied to lifetime wages, which means those who’ve earned low wages throughout their working lives often find themselves in dire straits.
By transitioning Social Security to a flat universal benefit and a supplementary savings account, as Andrew Biggs of the American Enterprise Institute has proposed, the federal government could make the program more generous to the poorest of the elderly poor while also making it more fiscally sustainable. Would this be a wildly popular proposal? Surely not. It would, however, be rather more attractive than hiking taxes on working- and middle-class younger workers to finance benefits for affluent retirees, which is why the idea of means-testing will never die.
Again, I’m under no illusion that Beto O’Rourke will run for president as the candidate of fiscal sobriety. What is striking, though, is the extent to which he seems to be keeping his options open, a strategy that suggests he’d prefer to run on personality than on a detailed manifesto that could prove unduly constraining in the months to come. And so O’Rourke the fiscal conservative could reemerge when we least expect it, as Senator Bernie Sanders and his various imitators and acolytes are sure to point out. Democratic primary voters appear poised to look past all the other controversies swirling around him, but whether they’re prepared to forgive him for a sensible approach to entitlement reform is an open question.