There are two main reasons for this resistance -- one strategic, the other ideological. Neither is persuasive, even from a progressive point of view, at a time when trillion-dollar deficits are the norm and publicly held federal debt is projected to reach 150 percent of gross domestic product within two decades.
"I don't want to see Medicare turn into a welfare program, which is what it would be if wealthier people didn't benefit from it or had a significantly reduced benefit," Rep. Keith Ellison, D-Minn., told ABC's George Stephanopoulos on Sunday. "It needs to be something shared that Americans are all in, that we all participate in and we all contribute to." Ellison is co-chairman of the Congressional Progressive Caucus, which opposes any cuts to Medicare or Social Security benefits.
The strategic rationale for this position is that reducing or eliminating retirement subsidies for people who can easily get by without them would spoil the illusion that all of us are "entitled" to those benefits because we have "earned" them through our "contributions." In reality, Medicare and Social Security are funded through intergenerational transfers from relatively poor workers to relatively affluent retirees.
That does not sound terribly progressive, but left-leaning opponents of means-testing worry that narrower versions of these programs would be politically vulnerable. "If Medicare turns from an earned benefit into a welfare program," warns Max Richtman, president of the National Committee to Preserve Social Security and Medicare, "you will see support dissipate."
There is not much evidence to support that prediction. In a 2010 Heritage Foundation report, Katherine Bradley and Robert Rector counted "over 70 different means-tested anti-poverty programs" and noted that spending on such programs "has grown faster than every other component of government over the past two decades."
Furthermore, Medicare and Social Security already are transfer programs; they are just poorly targeted. If the aim is to prevent the elderly from sinking into poverty or to ensure that they can obtain the medical care they need, it hardly makes sense to use payroll taxes extracted from middle- and working-class employees to cut monthly checks to Michael Bloomberg or subsidize prescription drugs for Ross Perot.
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