Age, ‘Needs,’ and Votes

April 25, 1960

“One of the most intensive and broadly based lobbying operations in recent history has made health insurance for the aged easily the No. 1 issue before Congress this year.” So begins a New York Times news story describing the tremendous campaign to promote the Forand bill. The propaganda and pressure are skillfully organized and timed. They are backed by the Americans for Democratic Action, by Walter Reuther and the Committee on Political Education of the CIO-AFL, by Senator Kennedy, who has introduced a companion in the Senate to the Forand bill in the House, and by a group of columnists who have begun suddenly and as if on signal to wail and weep in chorus about the plight of the aged. Anybody who doesn’t immediately join up is denounced as heartless and cruel. We are back in the revivalist atmosphere of the Townsend Plan of 25 years ago though today $16 billion a year is already being spent on old age and other OASI programs.

THE FORAND BILL

The Forand bill would add hospitalization and surgical insurance to the social-security program. It would profess to pay for this addition out of an increase in the OASI tax of ¼ percent on the employee and ¼ percent on the employer. Actuarial estimates by the insurance industry are that costs under the Forand bill would range from $2 billion to $2.4 billion for the first year, and, by 1980, from nearly $6 billion to more than $7.5 billion a year. This would require a level premium not of ½ percent, but of 2.32 to 2.97 percent of taxable payroll. Social-security taxes are already scheduled to reach 9 percent of payroll by 1969, without any Forand bill, and in later years to soar 11 to 16 percent of payroll.

These and similar facts were brought out in the brilliant speech in the Congressional Record of March 24 by Congressman Thomas B. Curtis of Missouri. At what point, asks Curtis, will the taxpayers rebel? Some of them are now paying more in social-security taxes than they pay in income taxes. The Forand bill has been supported by grossly misleading statistics concerning poverty and need. In any case it would deny benefits to the 4 million aged persons who, through no fault of their own, do not have social-security protection.

There are much deeper criticisms. In 1949, Edna Lonigan, in a pamphlet published by the American Enterprise Association, pointed out how, since 1933, there had been a constant expansion of the concept of the “needy”: “A zealous staff in a public welfare agency can find unlimited opportunities to add to the number of ‘needy’ families . . . and to the number of ‘needs’ which must be met by the public through taxes.” The last decade, with social-security “liberalization” in every election year, has confirmed that thesis.

SOCIALIZED MEDICINE

The Forand bill is a foot-in-the-door for a complete program of socialized medicine. Walter Reuther testified last July: “It is no secret that the UAW is officially on record as backing a program of national health insurance.” After this new aid to people of 65, people of 62 and 63 would want it. Then it would be argued that the medical needs of families with growing children were no less urgent. Finally everyone would be covered.

Socialized medicine is based on compulsory, not voluntary providence. Social “insurance” is a misnomer; individual benefits bear little relation to the individual tax. It is a program for the redistribution of income. The young will have to accept less than they produce in order that the old can get more than they produce. Pressure will build up for reducing an insupportable burden on the young by an inflation that reduces the real benefits of the aged. It is those who today weep most ostentatiously over the plight of the aged who are mainly responsible for the inflation that has already cut the purchasing power of their pensions in half.

“Security” can come only out of production. The policies of the welfare-statists penalize and discourage production. As Bastiat pointed out more than a century ago: “The state is the great fiction by which everybody wants to enrich himself at the expense of everybody.”