What Is Social Insurance? Why Does It Matter?

An introduction to our new series.

For the last century and a half, and in a more focused way for the last century, the United States has wrestled with a dilemma common to all other industrial economies: how to capture the wealth generated by market economies while combating the inequality and insecurity which they leave in their wake. The answer, first pioneered on a national scale in Europe, was social insurance. Social insurance programs were nationally administered programs, with compulsory contributions, which provided government assistance in cases of illness, unemployment and other vicissitudes of life as well as things like pensions in old age.

The key feature of social insurance programs was their universal character — they generally were available to everyone — and their guarantees of defined schedules of benefits. Though there was experimentation at the state and federal level in the late 19th and early 20th century, the evolution of social insurance programs in the United States came in three major phases: a system of veterans benefits in the aftermath of the Civil War, the creation of Social Security and other programs during the New Deal, and the creation of Medicare and Medicaid under Lyndon Johnson.

Yet the phrase “social insurance” tends to be little known in American political debates today. It tends to be replaced by the often pejorative term “entitlements,” which are perennially cast as threats to budgets and things in need of being curtailed or even eliminated more than protected or expanded. Such has been the rightward drift of American politics over the last half century.

The early 21st century economy has all the shades of insecurity that call for the expansion rather than retrenchment of social insurance programs. As our series will explain, economic, regulatory and policy trends over recent decades have all tended to increase economic insecurity and focus risk on the individual rather than spreading it across the population, as social insurance programs are intended to do.

The importance and timeliness of this topic and this series have been thrown into sharp relief by recent comments by Senate Majority Leader Mitch McConnell and other Republicans suggesting that the 2017 tax cut bill should now be paid for with cuts to Social Security, Medicare, Medicaid and other programs.

This is the backdrop for our series on Social Insurance. Our goal is to examine the most current social science data, which charts the growth of risk and insecurity in the economy, delve into the history of social insurance programs in the United States and to look prospectively, considering new proposals and approaches to social insurance which are suited to the particular challenges of the early 21st century. Our four-part series will run in these last few weeks before the 2018 midterms, along with features from our ongoing series taking a deep look at our country’s voting rights battles, which will continue through the end of 2018.

The series is made possible with a sponsorship by AFSCME. As is the case with all of our editorial series, the sponsor has no input or influence over the editorial content. They sign on just knowing the broad subject area, in this case the history and future of social insurance. Their sponsorship not only makes this project possible. It also allows us to publish the series entirely outside our Prime paywall as well as in a cleaner, ad-free format.

I hope you’ll enjoy and learn from the series and share the contributions widely. We look forward to your responses and feedback and thank you for being readers.

Josh Marshall is Editor and Publisher of Talking Points Memo.

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