Social Security, Medicare & Cheese

 I remember visiting my grandmother in Texas as a child in the summer and she would have these frozen blocks of government “cheese” in her freezer. Massive blocks – with important looking seals and eagles.  She got them to give to neighbors when they were in need.  

Apparently – this cheese was part of a larger program with the US Government when stockpiles got so large, they gave it away.  It was an entitlement, you didn’t have to pay for the cheese, it was just given to you if you were entitled to it.  

This week, as I was listening to the never-ending pundits and politicians talk about the tax bill, one high ranking house leader mentioned that because of the bill, we are going to have to make cuts to entitlement programs, such as Medicare & Social Security.  $25B in Medicare cuts.  (AARP is not a fan, as you can imagine)

That gave me pause – so I googled entitlement and it brings up three definitions: 1. the fact of having a right to something, 2. the amount to which a person has a right, 3. the belief that tone is inherently deserving of privileges or special treatment.

Let’s start with Social Security – signed into law by President Roosevelt on August 14, 1935, it created a social program to pay retired workers an income after retirement.  Taxes were collected starting in 1937 and regular benefits paid out starting in January 1940.  Who is eligible for this benefit – anyone who has worked for at least 10 years.

Now on to Medicare – The Medicare Act (Title XVII of the SS Act) was signed into law by President Johnson on July 30, 1965.  IT established Medicare, health coverage for the elderly and Medicaid a program for the poor.  Workers pay a tax for Medicare.  Who is eligible for this benefit – anyone who has worked for at least 10 years.  Then you are able to get Part A at no cost (hospital) and you pay a premium for Part B (outpatient or doctor services) – based on your income.

A couple who both make $44,000 in 2012 dollars who turned 65 in 2010 would have paid $722,000 into Social Security and Medicare.  

So if we apply the facts of these two programs to the definition of entitlement, I guess I can make a case that under definition 1 & 2 – someone would have the right to something – that they paid for their whole life – so if this was why it was an entitlement, I guess home ownership or automobiles are entitlements too.  

Now, let’s look at 3 – the belief that you are deserving of special treatment – that doesn’t hold water – one pays into this program and you have to meet certain criteria in order to be eligible for the benefits, i.e. working 10 years.  I don’t think that I would define work as a special treatment.   

So – in a nutshell:

$25B in cuts is a lot of cheese, isn’t it?

P.S. – And I use the term “cheese” loosely. 

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