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Your Financial Future

What "Entitlements" Are–and Aren't

In the context of Social Security and Medicare, the word is being greatly misused.

Does this sound familiar: People talking about “entitlements” with a sneer. And it might resonate. We’ve all seethed over someone else’s sense of entitlement, whether it’s the new colleague expecting to get the best office or the woman cutting in line at the grocery store, saying, “I’m in a huge hurry.”

People who feel they are owed something simply because they want it—that’s the kind of entitlement that gets you riled up.

Except that’s not what entitlement means in the context of Social Security and Medicare. Entitlement spending refers to funds for programs like Medicare, Medicaid, Social Security and veterans’ benefits. Their funding levels are automatically set by the number of eligible recipients, not at the discretion of Congress.

These rules allow Social Security recipients to be reasonably secure about how much money they can expect once they retire, based on their earnings and contributions to the system over the years. It’s even defined in C-SPAN’s congressional glossary.

Merton Bernstein, a professor emeritus of law at Washington University in St. Louis, puts it this way: “The whole notion of entitlement has been perverted to make it sound like a bunch of layabouts saying, ‘Oh, government, send me some money.’ The meaning of entitlement is that, if one meets the criteria laid out, one has a legal claim. That’s what it means.”

In the days before Social Security, impoverished retirees might receive welfare benefits based on the subjective judgment of those who administered the benefits, explains Bernstein. They would make the decision: Deserving poor or undeserving poor? And the decision might factor in your looks, your accent, your color or anything else they chose to take into account.

“What we have accomplished in law is to give people enforceable rights,” Bernstein says. “You have a right to a disability insurance payment. You have a right to Social Security, as long as you meet the statutory requirement.”

Put that way, entitlements don’t sound bad at all. But that’s not the way they are portrayed by fiscal conservatives. In his book On Borrowed Time: How the Growth in Entitlement Spending Threatens America’s Future, former Commerce Secretary Peter G. Peterson argues that entitlement spending is a heavy burden on American workers and threatens the American dream.

Other critics have raised the specter of generational warfare, claiming that selfish boomers are going to leave their children and grandchildren in poverty.

Does Social Security need some fixing? Yes, it does, but it’s nothing like the train wreck described by the system’s opponents. Proposed fixes generally fall into two categories: raising revenue or reducing benefits. The Center on Retirement Research at Boston College has published The Social Security Fix-It Book, which is an excellent guide to some of the proposed solutions with the pros and cons carefully explained. But fixing Social Security will take political will, reminiscent of the dedication of the National Commission on Social Security Reform in the early 1980s. Hysteria doesn’t help.

Gwendolyn King, commissioner of the Social Security Administration under President George H.W. Bush, says that people have worked hard all their lives to earn the benefits of Social Security promised them. “They are entitled and deserve to be.”

So the next time you hear criticism of entitlements, or claims that Social Security is going to wreck our economy, or charges that people who think they are entitled to Social Security might as well shoot their grandchildren, take those slurs with a grain of salt.

Opponents of Social Security are entitled to free speech. But you are entitled to the facts.

Martha M. Hamilton, formerly with the Washington Post, writes a regular column, Your Financial Future, for AARP Bulletin Today.

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