How Obama is Vastly Expanding the Social Safety Net

Since late last week, we have been fed a steady diet of grandma on catfood and the eeeebil Obama that is trying to make that happen. As usual, focusing on the method of inflation adjustment (that isn't simply applicable to Social Security but all of government), our venerable Leftist talking heads are missing the forest for the trees. Well, more like they're missing the forest for the branches. While people are howling at a revised method of calculating inflation, they are completely missing broader perspective on how this president is devising a more expansive social safety net.

So let's get some perspective. This president has expanded the social safety net in more broadly than anyone since the passage of Social Security - through health care reform, through expanding children's health insurance, through student aid expansion and through Medicare reforms. Let's talk about those.

Universal pre-kindergarten

Let's start with this upcoming budget, the thing that even before its release, caused the Donate-button Leftists to have their latest hissy fit. Just what is the president proposing in the budget beyond using Chained CPI to calculate inflation across government?

Currently, less than 30% of children three and four years old have access to quality early childhood education. President Obama is proposing to push that number to 100%. Universal preschool is not only a smart idea - children who have access to quality preschool succeed better in school, employment and family - it is also one of the most significant ways to expand the social investment infrastructure, to say nothing of the monetary value of the benefit it will provide to middle and low-income families with children. Just as a side benefit, it will reduce the flow in the school-to-prison pipeline, as children who have access to preschool tend to end up far less often in jail.

So, universal preschool adds a brand new benefit ('entitlement', if you will) to middle class and low-income families with children, helps children grow up to be more successful adults, and reduces incarceration to the dismay of the private prison industry and their Republican cronies. If that's not a progressive hattrick, I don't know what is.

Oh, and by the way, access to pre-K also boosts earning potential, which, guess what, boosts one's Social Security earnings. The earning potential, though, does not just increase for the children. Parents who would otherwise need to choose between staying home with their youngsters and hiring a babysitter can actually go to work while their children are in pre-K. Opportunity to work = higher earnings = higher Social Security benefits. Remind me again why we're quibbling about the method of calculating a cost of living adjustment on top of a base benefit when we have a chance to boost that base benefit itself by helping the youngest children and their families?

The Health Care Safety Net

When historians write about the Obama era, they will not be able to escape the most significant, history altering contribution of this president to the social safety net: his reforms and expansions of the health security safety net. Let's see in what ways.

Expanding the Children's Health Insurance Program: No one talks about this anymore, but as one of his first acts in office, President Obama signed into law an expansion of SCHIP, growing the reach of the program by more than 50%. With President Obama's signature on the law, SCHIP now covers 11 million children, up from 7 million before it.

Turning Medicaid into a low-income entitlement: The Affordable Care Act will, beginning next year, make every American who earns less than 133% of the federal poverty level eligible for Medicaid. And so that doctors and other providers actually take Medicaid, the ACA ensures that the reimbursement rate for Medicaid will be the same as that for Medicare. Yes, the Supreme Court limited it to only states that choose to accept the fund, but even the reddest of states will soon run out of excuses not to accept the free federal help to cover their citizens and reduce the cost of uncompensated care on hospitals. For states that still want to be holdouts, other states will be able to use the extra money to provide Medicaid coverage to an even more expansive part of their populations. When all is said and done, almost an additional 20 million people will be covered by Medicaid.

Turning health insurance into a federally subsidized middle class entitlement: In less than six month's time, Americans who do not have coverage through employment will be able to begin signing up for insurance plans through a state-based, federally regulated marketplace, and in less than nine months, the coverage will begin to kick in. The federal government will help cover the premiums through subsidies on a sliding scale for those up to 400% of FPL. As I have pointed out before, this is the largest middle class entitlement since Medicare. Oh, and no more caps on coverage, and no more rejections based on pre-existing conditions.

But the Affordable Care Act doesn't simply establish exchanges or expand Medicaid. For the first time in history, it establishes health insurance as an entitlement for low and middle income Americans of all ages, not just for the elderly, disabled and those in severe poverty. Think about this for a second. Who are the people that need the social safety net in their golden years the most?

Increasing benefits under Medicare: The Affordable Care Act has vastly improved benefits under Medicare, including in the following ways:
  • Making all preventive care and annual checkups copay-free.
  • Shrinking and eventually eliminating the prescription coverage gap.
  • A 50% discount on brand name drugs, while the donut hole closes.
These alone are saving seniors billions of dollars already. Seniors with prescription drug costs that used to be in the Medicare coverage gap will save as much as $15,000 by 2021 because of the reforms under the Affordable Care Act.

The opponents of Chained CPI often have complained that seniors' cost of living often grows faster than market inflation due to the fact that a disproportionate amount of their expenses go to health care. To a degree, they are right. But their problem in thinking is that we'd somehow solve that problem if only we could throw an extra 0.3% cost-of-living adjustment their way. The right way to solve that issue is by addressing Medicare costs directly, as well as the socio-economic factors that lead to the greatest need in the golden years. That's what President Obama has done with health reform. And don't go looking now, but last year, Medicare per-beneficiary cost growth was well below inflation, but I doubt the opponents of CPI would like to use that measure to calculate COLA.

The President has not only reduced medical costs for direct beneficiaries of Medicare (by far more than whatever one stands to "lose" from a minutely smaller COLA adjustment), he has instituted policies that will vastly increase coverage at every age. That not only means better health but also better economic condition for the middle class. After all, a family that does not have to spend all of their savings and mortgage their home to put their child through chemotherapy may be able to save up a little for their retirement.

Pell grants and student loan reform

Speaking of the need for families to have financial breathing room, enter President Obama's reforms to the Pell grant and student loan systems. In his time in office, the President has nearly doubled funding for Pell grants, and increased the number of students receiving Pell grants by 67%. The President also increased the availability of federal student loans and  reduced interests on them by cutting off the banks as middlemen, and kept them low through a hostile Congress.

Conclusion: A President that has changed the safety net for the better forever

The above, keep in mind, only focuses on the permanent safety net expansions in this president's agenda. We haven't even touched on his commitment to the temporary safety nets in hard economic times via unemployment benefit extensions, federal help to states to keep teachers, firefighters and police officers employed, and temporarily reducing the payroll tax.

As we can see, this president has expanded benefits under social investments and safety nets at every stage of life, and continues his effort to expand it more. So why is it so important to look at the president's commitment to the social safety net over the lifetime of individuals rather than just the pre-existing safety net structure of the elderly, the indigent and the disabled? Because the opportunities and safety nets available at the early stage of life always has a great impact on the net needed at a late stage. Because a successful social safety net is one that lifts the boat of opportunity for all as well as cares for those in the greatest need.

There is no going back from health care reform, student loan reform, and SCHIP expansion. And if we can help him pass it, there will be no going back from universal preschool.

So let's not sit on our hands and pout about a government-wide adjustment of the measure of inflation. Let's focus on the broader issues of the social safety net. Let's help this president pass universal preschool, even if it requires compromise. Let's not hound the president who has done the most for the middle class and the poor since FDR and accuse him of forcing granny on catfood. Instead, let's help him continue to make smart investments in our country.