Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, August 24, 1995 TAG: 9508240040
SECTION: EDITORIAL PAGE: A15 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
The notion that narrow conservative majorities in both houses of Congress could enact a political revolution over the objections of a liberal president and a sizable body of public opinion in five or six months is a delusion of the terminally immature.
The Republican agenda, even if every jot and tittle were passed and rapturously received, would not bear fruit - bitter or sweet - for years. Even then, cause and effect will hardly be crystal clear, except to partisans.
A proper judgment of the effects of Franklin Roosevelt's New Deal (1933-37) required almost 50 years. It wasn't until the late '70s that people became aware of serious problems with Social Security. Shortly thereafter, the savings-and-loan crisis arrived. You might say that originated in the banking crisis of the '30s, which produced federal deposit insurance.
When the bill to have the federal government guarantee modest deposits was brought to Roosevelt, he supposedly said, "Why, this is an inducement to unsound banking." Of course, it wasn't until after Congress foolishly raised the insurance to $100,000 for each account that the real fun began, as the Whitewater hearings are lately showing.
From 1933 to 1985, FDIC cost taxpayers nothing. Cleaning up the S&L mess may cost them $200 billion by 1998. You could argue that persuading people to trust their money to financial institutions has been worth it.
When Social Security began, the maximum annual tax on wages was $60. It was only $324 as recently as 1965. It's now $7,600, plus another 2.9 percent of all wages for Medicare.
The positive side is that Social Security has come close to eliminating poverty among the elderly. When it began, the government said almost 40 percent of seniors were living in poverty. For 1993, the Census Bureau reported that figure at 12 percent. But it also reported that 23 percent of those under 18 were impoverished - up from 15 percent 20 years before. Is there a relationship? Probably.
This isn't another piece on fixing Social Security, though that must come. But we might glimpse the dimensions of the issue by considering that in 1970, the average benefit was $114.20 a month. At the end of 1992 it was $653, representing a growth of 466 percent! While the average Social Security benefit has grown far faster than inflation, wages have not. In fact, the purchasing power of the average wage may have lost ground over the past 25 years.
But politicians can seldom afford the long view. Roosevelt was confronted with a crisis that many sensible people saw as threatening the security of the state. He saw a surplus of labor and was told it would persist for years. By placing a floor under their basic standard of living, Social Security was a means to persuade older workers to vacate their jobs.
Medicare arrived in 1966, which was about the time doctors and hospitals could really offer the afflicted substantial help. Had it been properly structured, there was nothing wrong with a government insurance pool for those over 65. Clearly, something had to be done. But President Lyndon Johnson wanted voters to believe they could have all the service they might obtain at very little out-of-pocket cost. Ditto for Medicaid. The doctors were bought off by assurances they could at last practice all the medicine they thought necessary and not worry about being paid for it. It couldn't work and didn't.
Coming at the same time was the Equal Employment Opportunity Commission. It was charged by Congress with investigating all complaints based on race, color, sex, handicap, religion, age and national origin relating to all terms and conditions of employment. The scope of the commission's work was enlarged by subsequent acts, including the Americans With Disabilities Act of 1990, which by itself claimed to cover 43 million people. There may be one 35-year-old white male heterosexual Episcopalian in perfect health who has no claim for redress under EEOC.
In the age of Oprah, where victimhood seems more to be desired than sainthood, we shouldn't be surprised to learn that EEOC has a backlog of 97,000 cases. The current chairman, named by President Clinton, has publicly questioned the practicality of investigating every claim submitted. "We just can't do it all anymore," he said. No wonder. But even GOP Speaker Newt Gingrich is steering clear of this one.
If you date modern America from Franklin Roosevelt, as I think you must, three conclusions are now possible. The first and most sinister is the corruption that spreads when government gets in the business of deciding winners and losers in the private sector. The corollary to corruption at the top is the inducement to millions at the bottom to live "on the nick," as the British phrase it. That is, warming themselves at the fire others have furnished - but also regarding the bones government throws them with contempt, even aggression.
But the main effect of liberal programs has been to increase the velocity of money flowing through the economy. Prosperity is now considered a right, and any government that can't deliver it must go. It's hard to imagine the desperate experiments we might embrace if the taps really run dry.
"You just can't mow the weeds," says Rep. John Kasich, chairman of the House Budget Committee, "you have to pull them up by the roots." But the entire Republican program, if enacted, would hardly have the broad impact of those things, like Social Security and Medicare, it hardly dares touch. The problem may be they arrived before the wolf was at the door. It will take a true crisis to make a new deal as enduring as the first.
Ray L. Garland is a Roanoke Times columnist.
by CNB