Entitlement Reform

Here's a multiple choice stumper from one of the practice tests that await you the week after next:

Which of the following programs are entitlements?
I. Medicaid
II. Medicare
III. food stamps
IV. Social Security

(A) I and II
(B) I, II, and III
(C) II and IV
(D) I and IV
(E) II, III, and IV

C is the correct answer because Medicaid and Food Stamps are means-tested programs whereas entitlements are not.

Entitlement (also called social insurance) - Gov't benefits that certain qualified individuals are entitled to by law, regardless of need.

Means-tested - Gov't programs available only to individuals who qualify based on specific needs.

Here's how this can get real confusing, even when entitlement reform is a huge part of the current budget/deficit battles on Capitol Hill. From Susan Milligan of US News & World Report:

"For long-term fiscal health, the nation needs to do entitlement reform. But first, there has to be sense-of-entitlement reform.

Entitlements, of course, are those popular federal programs meant to address basic human needs and maintain basic human dignity. Social Security keeps senior citizens from crippling poverty. Medicaid provides healthcare to the poor and disabled. Medicare is a federal healthcare plan for the over-65 crowd. The cost of the programs represents a huge chunk of the federal budget, and there is really no way to balance the budget without addressing those long-term costs. Certainly, the budget cannot be balanced merely by cutting spending that is not part of the entitlement programs. The idea that this can be done without cutting defense spending, either, is just laughable." [Check out a roundup of political cartoons on the budget and deficit.]

Sounds like she wasn't reading her Patterson text. Make sure you review it.

http://www.usnews.com/opinion/blogs/susan-milligan/2011/04/18/reform-tax-entitlement-before-gutting-medicare