The third rail re-enters the national conversation

 It hasn't taken much time for the question "What moves might a GOP-majority House make on entitlements" to emerge:

Republicans don’t plan to alter benefits for current Social Security and Medicare recipients, according to Rep. Chip Roy (R-Texas).

“What we have been very clear about is, we’re not going to touch the benefits that are going to people relying on the benefits under Social Security and Medicare,” Roy said Sunday on CNN’s “State of the Union.” “But we all have to be honest about sitting at the table and figuring out how we’re going to make those work, how we’re going to deal with defense spending and how we’re going to deal with nondefense discretionary spending.”

The Republican Study Committee proposed a budget for fiscal 2023 that would gradually increase the eligibility ages for Social Security and Medicare, and change the Social Security benefit formula for people 54 and younger, while not changing it for people closer to receiving benefits.

Democrats are likely to oppose those changes, as well as any cuts to Social Security and Medicare, and an ensuing standoff could result in another government shutdown. The 2018-2019 lapse in federal funding lasted 35 days after a fight over former President Donald Trump’s border policies and immigration.

What other course of action is there? Platitudinous insistences that Frances Perkins promised that money to Americans in perpetuity do not make for workable policy.

This is not a new conversation by any means. In the 1990s, much bristling ensued when the idea of freezing benefits was floated:

Back in 2001, I served on the staff of President George W. Bush’s Commission to Strengthen Social Security. While the commission did not agree on a single reform plan, two members — economists John Cogan of Stanford University and Olivia S. Mitchell of the Wharton School — argued for freezing the value of Social Security benefits in inflation-adjusted terms. Benefits wouldn’t be cut, but Americans retiring in the future wouldn’t receive higher benefits than today’s retirees, as the current benefit formula requires. That single change would have restored Social Security to long-term solvency.

The argument was not universally well received:

But freezing Social Security benefits came with the risk that seniors would have little else to rely upon in old age. In 1995, for instance, the New York Times warned of a “great retirement crisis . . . widely anticipated for the Baby Boomers who begin to reach retirement age in 2010.” Even wealthy seniors would not escape this crisis of inadequate incomes, the Times feared. Reducing Social Security would only worsen the problem of poverty in old age. The same fears, and the same arguments, are heard today.

But its veracity has been borne out:

Yet new data from the Congressional Budget Office show that, had Social Security benefits been frozen in 2001, retirees’ average household incomes in 2019 would have been reduced by just 3.9 percent. Seniors still would have been better off than ever before, while knowing that their Social Security benefits were secure, rather than facing a 20 percent potential cut when Social Security’s trust funds run out in the mid-2030s.

In late October, the Congressional Budget Office (CBO) released new household-income figures compiled from Internal Revenue Service data. The CBO figures, running from 1979 through 2019, include salaries, investment income, welfare payments, Social Security, and even Medicare benefits, while subtracting the various federal taxes that Americans pay.

The CBO data show that in 1979, the average American over age 65 had a household income after taxes and transfers of $43,000 (all dollar figures are inflation-adjusted to 2019). Seniors’ incomes averaged 23 percent below those of working-age Americans. Retiree households were more than twice as likely to live in the poorest fifth of the overall population as to live in the richest fifth. The 1970s stereotype of retirees eating cat food, if not accurate, at least reflected some semblance of seniors’ reality.

Four decades later, the picture is radically different. By 2019, average incomes for over-65 households had grown to $97,300, a 126 percent increase. For non-elderly households, average incomes rose from $58,795 to $104,297, just 77 percent higher than 1979. The income gap between seniors and working-age Americans in 2019 shrank from 23 percent to just 7 percent. Today, seniors are nearly twice as likely to live in the richest income quintile as to live in the poorest quintile.

This boils down to a significant degree to being a case of the diminishment of human agency. The great industrial leap of the 20th century gave us an advancement in comfort, convenience, safety and longevity unlike any our species had previously see. But for many, it cultivated a mindset that vocation was the core of human existence, and that, in some form, to some degree, one would be working for some organization that would, in addition to compensating one for performing some act of value, set one up with health insurance and retirement benefits. It was an easy addition for many people to make to incorporate Social Security, and later, Medicare, into this picture of what life should look like. 

The entitlements' unfunded liability problems are a modern situation. Three hundred years ago, we didn't have air conditioning, plane travel or transplant surgery, but the state's control over our destiny was not among our concerns.