Universalism Without the Targeting: Privatizing the Old-Age Welfare State

Abstract

Decades of conservative attempts to scale back Social Security and Medicare, by limiting the program's universality through means testing and drastic benefit cuts, have failed. Thus, after numerous unsuccessful attempts at dismantling the U.S.'s universal old-age welfare state, or even meaningfully restraining its growth, conservative critics have developed a new approach. They are wrapping promarket "privatization" policy proposals in the popular universal framework of Social Security and Medicare. What is fundamentally different about privatization is that it embraces (or at least acquiesces to) key aspects of universalism, including broad-based eligibility and benefits that "maintain accustomed standards of living," which leave universal programs with rock-hard public support. Proponents argue privatization will "save" these programs. What distinguishes this approach from past retrenchment efforts is that promarket privatization policies, while supporting key universal tenets, will retrench Social Security's and Medicare's redistributive facets. Instead of limiting the most popular features of universalism, privatization proposals limit the redistributive elements of our large social insurance programs.