It is called the high cost of good intentions, the history of. U. S. Entitlement programs. John thank you very much. I left omb in the mid in 1998hen returned to serve as the deptive omb then left again and returned stanford. What were the lessons that thelearned working at office of management and budget. What were the lessons that you learned working at the office of management and budget. Well it seemed it was toward spen. D more as you know Ronald Reagan more than any other president. How powerful they were. The Biggest Surprise in the if. Was fr yes. Yes. Tell that story. True with Social Security. But the Franklin Roosevelt of was not like the Franklin Roosevelt of 1933. Franklin roosevelt in 1633 managed to roosevelt of 1933. In his first year in office, he removed nearly 400,000 i disabledd war the rolls he re duesed by 50 percent and extra in ry change in the whole history of Entitlement Programs. Interesting about it was the way he went about it. Entered office, of course, we prn the midst of a great depression. The federal budget was in shambles. He had campaigned on promise to get the federal finances inner control, topped do so by raining in Government Spending. Veterans programs accounted for 20 percent of federal spending at the time. To do something about programst very rans look was going to control spending. So self reason days after taking office, he asked congress for the authority to modify all veterans Entitlement Programs. Ad sent up to the hill proposal that congress abolished all Entitlement Programs for veterans to give him the authority to right the regulation and set benefit levels. Continue days later, Congress Passed the economy act which did so. Within the next year, the administration wrote thelations, changing benefit levels, changing eligibility rules, and the result was nearly 400,000 from thewere remove removed roles. What was most interesting to me about roosevelts actions fact that hee took action right away on the strength is at the maximum right after the election. He was i would say a brilliant politician. To mod foy the bonus marchers that had returned to you mayon, so as recall the year before, a group of bonus marchers came ofand were driven out washington by such soldiers. What are bonus watcher ifs bonus watchers were world war i veteran, who had been benefit, inonus addition to their that promise but had been made years earlier aboute payment was due 1015 years done this road, so they wanted that bonus payment now. Were suffering from the depression. They wanted the bonus payment now. Watched to washington to demand the bonus payment in 1632. They gathered and set up aroundand i think 20,000 of these bonus marcher marchers, the government was worried about communist infiltration and so forth, and general mcarthur, ordered the american troops to the bonusut marchers and was large scandal in American History as one american soldiers drove out a group of American Veterans from the nations capital. Killed . E one individual was killed during the action. Thene bonus americans returned in 1933 to protests against the proposed reductions and again to claim promised benefit. Roosevelt was very different hoover, though. His solution was to send camps andt to the have her sing songs and listen to the veterans plight and sympathize with them. He also offered them jobs. 25,000 civilian Conservation Court job was be set aside for veterans with those two actions the veterans went away was able to go through with his regulatory changes. Economy act in 1633 which is right after he is in the office was what . What did that do . Oh, what that did was it repealed all federal Entitlement Programs for peppizationme benefit and repealed the rasp hadnt that vet to world war i disability repel rebellion benefits, spanish american war benefits. The only Entitlement Program the was excepted was civil war Pension Program. In addition it allowed the then to set the new rules of eligibility and allowed him to set new benefit levels. You say the night before, that was introduced he had the first fireside chat, and this fireside chat seems to me, had 30 some like twitter in those days. Of fdr. An excerpt i can assure you, my that it is safer to keep your money in a reopened bank, that it is to keep it the mattress. The success of the whole National Program depends, of course, on the cooperation of public, on the intelligence support, and the use of the relike still systems. Is he doing sneer well, during that speech, he was tackling the main problem with the private Financial System which was the banking crisis. Thatve so many banks have failed. That point, that evening he too took the opportunity deal well the problem that he had with the congress with respect to the economy act. He was worried about a senate his bill. Of the house had passed the bill already then the next week he senate. Ng up in the so worried about the, about the filibuster, he deviced a prevent the fate from filibustering him. He decided it was time for a as he told his senior staff that night. A proposaloduced that would allow for the sale of 3. 2 beer. So it was prohibition at the time. Popular. Wildly and so under the senate rules, to vote on the 3. 2 beer proposal, they had to first dispense with the economy act and so, of course, passed the economy act without a filibuster, so they beer get to the 3. 2 bill. And they did so. Bills pass. Both bills became law. As you said in the middle longer vets are no going to get the pension benefit. Let me go to the whole point of the book. What is an entitle. That is a very good question. Entitlement has come to mean many Different Things to many different people. To some people, an entitlement is something that just cannot be taken away. That people have an absolute and ir ref cable right to. Other people regard pensions entitlements as an unearned benefit, as something that away, and inn fact, something that is not really doe served and is gin from an earned earned right benefit like Social Security. Latter groupthe say Social Security its not an entitlement. That is a very bad word. Earned their benefit. Where as a food stamp benefit, an entitlement. But in the simplest term, the benefit, or Entitlement Program is originates with a law that gar renn tood a benefit guaranteed a benefit under the law. It created the need for entitlements . Well, i would have to say, try. E 16th cep then 19th century was the primary driver behind entitlements. All of them. The first one if. Good question. First Entitlement Program was a program for veterans,ary war and the idea was to compensate them for the loss of life or while in service to their country during the war of independence. That was the first entitlement then throughout the 19th century, during every war, we established a similar entitle veterans of those war. You say it was disability it spreadbut then to people who just were in the service, then you say, the wives. Right. Is explain how that happened and when. Yeah. Phenomenon that i am about 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 ust outside that eligibility circle begins to clamor for benefits and Pressure Congress to be included among the receiving benefits. Ventually, congress acquiesces those individuals end up 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 assistance as those who had served 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 benefits were confined to those who had been kiss abled 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 9th century. Brian in your introduction, you say 55 of all u. S. Households received cash or assistance fro brian in your introduction, you at least one major federal Entitlement Program, let me read n. Among all households headed by a 40 n under 65, over eceive entitlement benefits. 85 of households led by a single mother received 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 . Ohn about 70 years now. Most Entitlement Programs begin ith good intentions. The veterans programs, the intention there to provide compensation for workers soldiers that had been disabled during the war. You could hardly think of a more honorable purpose for a 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 merica 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. Hes making fun of the republicans. Thelets watch. 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] president roosevelt we believe in all these things, but we do not like the way the present 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] brian sounds a little familiar. John doesnt it . What a masterful politician. That has been the promise of those that proposed one Entitlement Program to 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. They held the white house, the house, and the senate for helped realign the public behin 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 created, 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 check the dates here. The first part is 2006, the second part is 2013. Here is harry reid. Today the senate is considering a bill to increase the nations debt by 781 billion. F 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 existing obligations should be the standard. Brian the first time george ush 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] second time he was not. If wet our budget on a sustainable path, then were choosing decline as a 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 revenue neutral tax reform 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. 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. Its been reluctant to single out individuals for criticism. T 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 has gone on for 200 years. These force that is are operating on our congress, on our elected official, are just powerful forces. What you are seeing what, we saw with paul ryan, and what we saw with harry reid, are 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 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 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 that gained their sustenance from these programs. From the general public for some relief from the hardship of the rethinking the wisdom of the recession, but the pressures were just overwhelming. There was a cry for reagan to stay the course, and that meant keep those tax rate reductions that you had put in place, and tcheeps budgets savings that you had put in place. Do not give up on them. I think reagan was very, very strong in not giving in to those pressures that were operating at the time. Brian who was your secretary of labor . John it was a wonderful man, raymond j. Donovan a terrific young man. Actually, a middleaged man who was treated very, very badly by washington. As you may recall, ray, after serving for almost four years as secretary of labor and undergoing an enormous number of investigations, including special prosecutor, all of which had shown that the charges that had been made against him were completely made out of whole cloth. The District Attorney of the new york indicted him on the same charges and he had to resign from office. Truly a sad, sad washington story. Brian i am not sure this is the exact quote, but my memory was, he said, where do i get my good name back . John that is right. Brian you have watched a lot of governments since then. Is it too big a risk today to come to government because of what happens once youre in it . John there is a risk. The important thing about ray donovan was that he was exonerated of all charges and walked out of the courthouse to make that famous, famous comment. I would say this, yes there are risks associated with Public Service in washington. But i would say to young people, do not allow that risk to deter ou from service. From my own standpoint, Public Service is one of the most enjoyable, one of the most interesting, one of the most rewarding periods of my entire life. I do believe that young pe