Republicans rant endlessly about so-called “entitlement programs” as though they are evil theft from the treasury, while Democrats rise up in anger bearing torches and cudgels whenever the slightest economies are suggested for them. Well, that’s an exaggeration of course, but it does capture the essence of the sorry situation we are in. I believe both are sadly wrong and, if given their way, both will do irreparable damage to our economy. On this topic, as others, we need to be sensible, compassionate and frugal, and we need to listen carefully to those with whom we disagree. When did this ever describe the swamp dwellers in Washington?
That is just one-man’s opinion. Take it for what you will. But the point of this blog post is to relate a piece of oft-forgotten history involving what we now call entitlements. It is relevant to our times because it provides an important message for a possible way out of this mess.
Do you know what the greatest single reduction of entitlements in our history was, and who did it? The answer to the second part of this question surely should be a surprise. It is Franklin Delano Roosevelt, who is the originating force behind many of today’s social welfare programs. In 1932, he had campaigned on the promise to bring federal finances into better order at a time when they were in total disarray and many despaired for the nation’s future. At that time, veterans’ benefits took up fully 25% of the federal budget! A grateful nation had bestowed far more than they could afford on returning soldiers of WWI and even earlier on those from the Spanish-American War.
Almost immediately after taking office on March 4, 1933, FDR submitted a proposal that would slash the federal budget. It would eliminate several government agencies, reduce the pay of civilian and military federal workers and, most significantly, slash veterans’ benefits by 50%. The Congress acted swiftly, even in the face of stiff opposition, and passed this virtually intact as the Economy Act of March 20, 1933. In the event, the impact of this bill was not as great as had been hoped. The effect on the deficit was minimal, perhaps due to other influences and general inertia in the economy. And some of the veterans’ benefits were later restored by two Supreme Court decisions.
But that is beside the point, which is that entitlement reform is possible but, in my opinion, only if Democrats do it. But when was the last time you heard any Democratic leader propose entitlement reform as a party platform plank? They always proclaim that they are open to reasonable changes, but they do so with obvious reluctance and never on their own accord. Hence their response to any Republican plan is fear and loathing, together with loud complaints about doom for all but the fat cats.