He discusses his book, the high cost of good intentions the history of the federal Entitlement Programs. Brian john cogan, author of the high cost of good intentions. When did you get interested in entitlements . John it goes back to my years in washington in the 1980s during the Ronald Reagan administration. I served for a few years at the office of management and budget. It was at that point i saw how these entitlements grew and how difficult they were to control. That was the origins of my interest. Brian how long were you there . John i was there for three years at omb. I served prior to that at the department of labor. I left omb in the mid1980s, and then returned in 1988 to serve as the deputy at omb and returned return to stanford. And then left again and returned to stanford. Brian what were the lessons that you learned working at the office of management and budget. John the main lesson was just how difficult it is to control spending. It seem like all of the forces in washington were towards war and more spending. And as you know, Ronald Reagan more than any other president made a comprehensive effort to rein in Government Spending. He was modestly successful. Having been part of that battle, i saw how powerful these forces were expanding Government Spending were. Brian my Biggest Surprise in your book was fdr. Tell that story. John most people think that the entitlement state began with fdr. That is in fact true. Social security. But the Franklin Roosevelt of 1935 was not like the Franklin Roosevelt of 1933. Franklin roosevelt, in 1933, managed to engineer the largest reduction in any Entitlement Program in american history. In his first year in office, he removed nearly 400,000, mostly world war i disabled veterans from the rolls. He reduced the veterans compensation rolls by 50 . An extraordinary change in the whole history of Entitlement Programs. What was interesting about it was the way that he went about it. When he entered office, we were in the midst of the great depression. The federal budget was in shambles. He had campaigned on a promise to get the federal finances under control and to do so by reining in Government Spending. The veterans programs accounted for about 25 of federal spending at the time. So we had to do something about veterans programs if it would control spending. Seven days after taking office, he asked congress for the authority to modify all veterans Entitlement Programs. And sent up to the hill a proposal that congress abolish all Entitlement Programs for veterans and give him the authority to write the regulations and benefit levels. 10 years later, Congress Passed the economy act which did so. Within the next year, the administration changed the benefit levels, changing eligibility rules, and the result was nearly 400,000 veterans were removed from the rolls. What was most interesting to me about roosevelts action was that beside the fact he took action right away when a president s strength is at its maximum right after an election, he was a brilliant politician. So to get the bill passed, he had to mollify to some extent the bonus marchers that had returned to washington. As you may recall, the year before, a group came in and were driven out of washington by u. S. Soldiers. Bonus marchers were world war i veterans who had been promised a bonus benefit in addition to their compensation. That promise had been made years earlier and payment was due about 1015 years down the road. They wanted that bonus payment now. They were suffering from the depression, said they wanted the bonus payment now. So, they marched to washington to demand their bonus payments in 1932. They gathered and set up tents. It was in anacostia. I think there were around 20,000 of these bonus marchers. The government was very worried about communist infiltration. Finally, General Macarthur ordered american troops to go drive out the bonus marchers. It was a very large scandal in american history. One group of american soldiers drove out a group of American Veterans from the nations capital. Brian anybody killed . John one individual i believed was killed during the action. So the bonus marchers then returned in 1933 to protest against the proposed reduction and to claim their promised benefits. Roosevelt was very different. Then herbert hoover. His solution was to send eleanor out to the camps and have her sing songs and listen to the veteran plate and sympathize with them. He also offered them jobs. 25,000 civilian conservation jobs would be set aside for veterans. With those two actions, the veterans went away peacefully. And he was able to go through with his regulatory changes. Brian the economy act of 1933 was what . What did that do . John it literally repealed all federal Entitlement Programs for veterans compensation programs. It repealed the entitlement of veterans had to world war i, disability benefits, rebellion benefits, spanishamerican war benefits. The only Entitlement Program that was exempted was the civil war Pension Program. But in addition, it allowed the president to set the new rules of eligibility and allowed to set new benefit levels. Brian you say the night before it was introduced he had his first fireside chat. This fireside chat, seems to me, because he had 30some, like twitter in those days. Here is an excerpt of fdr. President roosevelt i can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress. The success of our whole National Program depends upon the cooperation of the public, on its intelligence support and on its use of a reliable system. [end video clip] brian what is he doing here . John during that speech he was tackling the main problem as he sought with the private financial system, which was the banking crisis. We have so many banks. That had failed. At that point, that evening he also to be opportunity to deal with the problem that he had with the congress, with respect to the economy act. He was worried about a Senate Filibuster of his bill. The house had passed the bill already. The next week it was coming up in the senate. Worried about a filibuster, he devised a strategy to prevent the senate from filibustering. He decided it was time for a beer, as he told his senior staff that night. He introduced a proposal that would allow for the sale of 3. 2 beer. It was prohibition at the time. This was wildly popular. Under the senate rules, in order to vote on the 3. 2 beer proposal, they had to first dispense with the economy act. Of course, they passed the economy act without a filibuster so that they could get to the 3. 2 beer bill. They did so, both bills passed and both became law. Brian as you say, 400,000 vets know longer get their pension benefits. Let me go to the whole point of your book. What is an entitlement . John that is a good question. The word entitlement has come to mean many Different Things to many different people. To some people, an entitlement is something that cannot be taken away. That people have an absolute and irrevocable right to. Other people regard pensions or entitlements as an unearned benefit, as something that can be taken away and something that is not really deserved and is distinguished from an earned right benefit, like Social Security. People in the latter group say Social Security is not an entitlement, they have earned their benefits whereas a food stamps benefit, they regard as an entitlement. In the simplest terms, in entitlement benefit, or Entitlement Program, originates with a law that says, if you meet some prespecified eligibility rule in law, then you will be guaranteed a benefit under the law. Brian how much has war in our history created the need for entitlements . John i would have to say, in the 19th century it was the primary driver behind entitlements. The first Entitlement Program was a program for revolutionary war veterans. The idea was to compensate them for the loss of life, or limb while in service to their country during the war of independence. That was the very first entitlement. Throughout the 19th century, during every war, we established a similar entitlement for veterans of those wars. Brian you are saying it was disability at first, but then it spread to people who just where were in the service, then you say the wives. Explain how that all happened. John this phenomenon that i am about to describe is common throughout 200 years of entitlement history. It is common among all Entitlement Programs. Basically i will describe in general. What happens when an Entitlement Program is created, the eligibility pool is a very narrow group of particularly worthy people that are usually deemed to be eligible for benefits. Then, over time, a group that is just outside that eligibility circle begins to clamor for benefits and Pressure Congress to be included among the receiving benefits. Eventually, congress acquiesces those individuals qualifying for benefits. That just starts the process all over again. Another group of people closer to the eligibility Boundary Line starts clamoring for benefits. Congress eventually acquiesces. Eligibility expands. We start always with a very small group and it spreads outwards. To a point where the original purposes of these entitlements is no longer recognizable. So for the civil war program, the original Entitlement Program for disabled revolutionary war veteran was confined just to members of the Continental Army and navy. They were a federal responsibility. But then 20 years later they wanted to include members of the state militia. Volunteers, these individuals were no less deserving of the systems as those in the Continental Army. Of assistance as those in the Continental Army. By the 1830s, congress had extended the program to include anyone who had served in a revolutionary war for at least nine months. The next Entitlement Program, large Entitlement Program was the Disability Program for Union Veterans during the civil war. That program followed almost exactly the same path. First then were confined to First Benefits were confined to those that had been disabled during wartime service. 30 or 40 years later, virtually all Union Veterans who have served their country in the civil war were made eligible for assistance. That has been the pattern that has driven entitlement in the modern era as well as during the 19th century. Brian in your introduction, you say 55 of all u. S. Households received cash or assistance from at least one major federal Entitlement Program, let me read on. Among all households of people headed by a person under 65, over 40 received title benefits. Entitlement program benefits. 85 of households led by a single mother received benefits and nearly six out of every 10 children receive benefits. 58 percent are growing up in a family under an entitlement roles. How long has it taken us to get to 55 of all households receiving something . John about 70 years now. Most Entitlement Programs begin with good intentions. The intention there is to provide compensation for soldiers disabled during the war. You can hardly see a more honorable purpose for the program. The new deal of entitlements and Great Society of entitlements, they had very good intentions to provide a safety net of assistance against old age poverty, to provide protection against poverty for those who cannot provide for themselves. These are goals everyone in america shares. What we got today is described with those statistics from the book is a system that does not bear any resemblance to those basic goals. That is the nature of the growth of entitlements and that is why we have a problem today. Brian here is more from fdr, beautiful black and white done by the minneapolis pbs station. He is making fun of them republicans. Lets watch. [video clip] as we believe in Social Security, we believe and work for the unemployed, we believe in saving homes. Cross our hearts and hope to die. [laughter] we believe in all these things, but we do not like the way the administration is doing that. Just turn them over to us. We will do all of them. We will do more of them, we will do them better, and most importantly, the doing of them will not cost anybody anything. [applause] [end video clip] brian sounds a little familiar. John doesnt it . What a masterful politician. That has been the promise of those that got entitlement. Those that have proposed one Entitlement Program after another. You can have it, i will give it to you and it will not cost the country a dime. Brian so who has been better or worse at this over the years . Republicans or democrats . John i have to say this has truly been a bipartisan effort. As you go back to the 19th century, with the civil war Pension Program. It was during that era that the republicans used pensions to gain an electoral advantage. In fact, the Pension Program helped realign the public behind the republicans during the 1890s. He held the white house, the house and the senate for 14 consecutive years. I think largely because of tariffs and the Pension Program. The democrats were generally opposed to pensions until they caught on in the first decade of the 20th century. In the modern era we see the same phenomenon, except the parties flipped. The democrats have been the proposers of all the new entitlements and the republicans have stood in opposition, initially. Once they have gotten to power after an entitlement has been commuted, they have generally supported the expansion of those entitlements. Brian we have some video on both sides, but on the one hand, then several years later on the other hand. Lets start with harry reid. Let me just start with the dates. The first part is 2006, the second part is 2013. Here is harry reid. [video clip] today the senate is considering a bill to increase the nations debt by 781 billion. If adopted, it would be the fourth such increase in five years that this administration has been in office. I will be opposing this latest request and i hope that people on both sides of the aisle will do the same. It allows the United States to meet its obligation or it should be the standard. [end video clip] brian the first time george bush was in office, and the second time he was not. [laughter] brian before you comment on it, let me put these two together. Here is speaker of the house paul ryan. First is in 2011 and the second is in 2017. [video clip] if we fail to put our budget on a sustainable path, and we are choosing decline to world power. The unsustainable trajectory of Government Spending is accelerating the nation towards the most predictable economic crisis in american history. You are not prepared to say that you are insisting on revenueneutral taxing that does not add to the deficit . We want the economy growing that will get middle income taxpayers a tax cut. We want to keep american businesses in america. That is more important than anything else. [end video clip] brian what are we supposed to believe, who and when are we supposed to believe . John consistency has never been a hallmark of members of members of congress. It is a far larger problem than any Single Member of congress. It is a problem with the institution, it is a problem with the presidency. Like i said, it is a problem that for 200 years, these forces that are operating on our congress, on our elected official, just powerful forces for what you are seeing, what we saw with paul ryan, and what we saw it harry reid are just examples of how individuals react to those pressures, pressures to be reelected. Brian go back to your government experience. What were the first years that you are there . John 1981 and 1982. I was assistant secretary at the Labor Department. Brian what was your big take from that experience . John it was just how difficult it is to lay in these Entitlement Programs. To rein in these Entitlement Programs. 1981 and 1982 were years of a very, very deep economic recession as the Federal Reserve and administration tried to ring administration out of the economy. Inflation out of the economy. The recession that we had was a deep recession that we had had since the end of world war ii. So, immediately, that recession caused congress to start rethinking the wisdom of the initial reductions that it had made in the various Entitlement Programs. I saw this tremendous pressure coming from the hundreds of lobby groups that have been formed around these programs they gain their sustenance from these programs. From the general public for some relief from the hardship of the recession, but the pressures were just overwhelming. You may read call this