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21 January 2013

Why ‘Entitlement’ Programmes Aren’t Really Entitlements





By Jim Huffman
 
Almost everyone seems to agree that some combination of Social Security reform, Medicare reform and Medicaid reform is essential to any long-term fix of the federal government’s fiscal woes. But few in Washington are prepared to face the political challenges of such reform. Perhaps it would help if we stopped calling these federally financed benefits “entitlements.”

In any legal sense of the term, Social Security, Medicare and Medicaid are not entitlements. Unlike public employee pensions, which are contractual obligations now threatening to bankrupt state and local governments, Social Security, Medicare and Medicaid benefits can be modified, or even eliminated, by a majority vote of both houses of Congress along with the president’s signature. They are benefits, not entitlements.

It’s easy to understand why Social Security beneficiaries, having experienced decades of withholding from their paychecks, might think of their monthly payments as entitlements. The program was originally billed as an alternative to private retirement accounts, and still today the government pretends that FICA withholding goes into a trust fund analogous to a privately funded retirement account. Remember Al Gore’s lock box?

It’s also easy to sympathize with the many individuals who depend on these federal programs for basic income and health care. But recognition that millions of Americans depend on the continued solvency of the federal government for their basic needs should lead us to be clear that Social Security, Medicare and Medicaid are not inviolable entitlements. That’s fortunate, because entitlements cannot be changed unilaterally, and without congressionally mandated changes in future benefits and terms of eligibility none of these programs is sustainable.

Almost a half-century ago Charles Reich, a Yale law professor, wrote an article in which he argued that government benefits like Social Security and welfare were becoming “the new property” to which the recipients have rights comparable to rights in traditional real and personal property. Reich’s idea was of a piece with the contemporaneous claim by Harvard professor Frank Michelman and others that the 14th Amendment to the U.S. Constitution should be interpreted to guarantee a minimum level of basic welfare to all Americans.

Although the Supreme Court teased these new property advocates with its 1970 ruling in Goldberg v. Kelly that welfare benefits cannot be terminated without a hearing on the question of eligibility, it never took the next and more consequential step of holding that Congress is obliged to provide a minimum level of welfare to all citizens. Yet we continue to talk as if we do have such claims against our government.

It’s one thing to hold, as the Court did in Goldberg, that an individual cannot be denied benefits then available to other similarly situated individuals. It’s quite something else to assert an affirmative right to government benefits even in the absence of congressional approval, or in the event of a congressional decision to reduce or eliminate existing benefits.

This distinction between negative and affirmative rights is essential to the U.S. Constitution’s guarantees of individual liberty. Though many on the left continue to advocate for affirmative rights to a minimum level of welfare (housing, health care, nutrition, etc.), the reality is that rights in the American tradition are guarantees and the government cannot guarantee affirmative rights because it cannot guarantee that it will have the resources required to provide whatever those minimum benefits are found to be.

We should aspire to provide for the less fortunate, but we need look no farther than the impending insolvency of Social Security, Medicare and Medicaid to understand the difference between guaranteed rights and noble aspirations. It’s not that our governments never infringe on our constitutionally protected liberties, but rather that simple deference to the rule of law, not physical and financial resources, is all that is necessary for government respect of individual rights. No amount of good intentions or judicial mandates can assure that government will be able to deliver promised benefits that exceed its available resources, whether borrowed or from current revenues.

Social Security, Medicare and Medicaid provide important benefits for millions of Americans. Because they are important, and in many cases essential, we should stop referring to them as entitlements and acknowledge that they are benefits dependent on the long-term fiscal soundness of our federal government.

Jim Huffman is the dean emeritus of Lewis & Clark Law School, the co-founder of Northwest Free Press and a member of the Hoover Institution’s De Nault Task Force on Property Rights, Freedom and Prosperity.



SoRoPlease allow me to add....

There is no right to Social Security, even if you pay into the programme for 50 years. See Flemming v. Nestor, 363 U.S. 603 (1960). Although the government does have a moral obligation to pay Social Security benefits, it does not have a legal obligation to do so. In Flemming, the Court ruled that a person does not have a “contractual earned right” to receive Social Security benefits.  Thus, neither a contractual nor property right exists for the individual.
 
There is no right to Medicare
(and, by extension, Obamacare). See Heckler v. Ringer, 466 U.S. 602 (1984).  Neither a contractual nor property right exists for the individual.   The Secretary of Health and Human Services renders a "final decision" on the claim in the same manner as is provided in 42 U.S.C. § 405(g) for old-age and disability claims arising under Title II of the Social Security Act. Title 42 U.S.C. § 405(h), to the exclusion of 28 U.S.C. § 1331 (federal question jurisdiction), makes § 405(g) the sole avenue for judicial review of all "claim[s] arising under" the Medicare Act. The DHHS Secretary makes the final determination of what is covered and whether you are entitled to a particular treatment.

Patients whose medical care is provided by public funds have no constitutional right to whatever care [their physicians] using "the highest standards of medical practice"...may "judge necessary"... or to obtain that care "from a physician ... of their choice." - AAPS v. Weinberger, 395 F. Supp. 125 (1975).

Unlike the "right to die" or the "right" to have an abortion, the right to choose one's medical treatment may not be constitutionally protected. A US Circuit Court has ruled that a Medicare beneficiary may not even spend his own money to buy a service that Medicare regulations say is "unnecessary",  New York State Ophthalmological Society v. Bowen, 861 F.2d 1283 (1988).

By declining to hear the appeal, SCOTUS upheld the finding of the District Court that physician participation in Medicare was "voluntary." Underlying the constitutionality of the challenged legislation is the basic premise that each individual physician and practitioner "has the ability to choose whether or not to participate in the system." It is true that there will exist economic incentive or inducement to participate in the programme; however, such inducement is not tantamount to coercion or duress.

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