Comment: Budget with Care

I recently proposed that instead of getting rid of what the Bush people call the death tax we abolish the "pre-death tax." This term, coined by my friend Michael Lipsky, refers to the Medicaid provision that requires people to spend down their personal assets on nursing-home care before Medicaid starts paying the cost. Medicaid is a means-tested program for poor people. The premise of current policy is that middle-class people who need long-term care must first impoverish themselves and then qualify for Medicaid as medical paupers.


The exemption on the estate tax, currently $675,000, will rise to $1 million by the year 2006 under existing law. That's why it's a tax on only the wealthiest 2 percent of estates. But the Medicaid spend-down has no such exemption. Public policy takes away almost every nickel; and God help you if you somehow come out of the nursing home and then have to make ends meet.


By one of those splendid coincidences, middle-class Americans "spend down" about $30 billion a year paying nursing-home bills before Medicaid kicks in--or almost exactly the sum that George W. Bush wants to award to the wealthy in estate-tax cuts. The remedy is hardly rocket science. It is obvious politics to retain the "death tax" on the wealthy, dedicate the proceeds to universal nursing-home coverage, and thereby spare the pre-death tax on the middle class.


And this proposal suggests the germ of a broader politics. We will not trump the Bush tax-and-budget program with a slightly lower tax cut or a slightly different one. Rather, it's time to be clear that liberals and conservatives really do have fundamentally different public philosophies. Liberals think that there is a necessary and constructive role for government, in this case for social insurance. Conservatives don't. But despite the public's supposed conservative mood, on this big, defining question most Americans are liberals.


As America ages and as employed mothers become the norm, the great underreported issue is who does society's caring work and how to finance it. At a moment when there is a budget surplus stretching into the trillions of dollars, it is appalling that Congress is on the brink of redirecting the money to further fatten private wealth. The right professes to honor the family. But what stresses actual families is the tension between paid work and parenting and the financial worry of prolonged frailty and illness in old age.


There is no alternative to paying much of this cost socially other than to warehouse the frail elderly and leave the young to haphazard custodial child care and the streets. A politics of socially financed caring builds three kinds of solidarity that liberalism depends on: between the citizen and the government, between the old and the young, and between caring workers and the recipients of that care.



This issue of The American Prospect features several articles on the politics of aging and caregiving. One, by Joan Fitzgerald, points out that professionalizing work in nursing homes is one precondition to improving the quality of care. (We learned that lesson for five-year-olds when we professionalized kindergarten teaching a century ago.) In another piece, Elizabeth Benedict reflects on her unpaid caring work managing assisted-living arrangements for her elderly mother and aunt. Benedict questions how society will deal with the increased demand for such arrangements when the large baby boom generation retires.


At present, nearly all assisted living is paid privately. Since such apartments typically cost upwards of $30,000 a year, four out of five elderly people can't afford them. Medicaid would save some money on a per capita basis by allowing more people to go into assisted living, which costs roughly half of what nursing homes do. But the overall expense would necessarily rise since so many more people would want to participate.


A decade ago, the anti-social-insurance right tried to create a politics of young versus old. The New Republic ran a famous piece about the pampered elderly headlined "Greedy Geezers." Short-lived front groups of the supposedly indignant young were created, with names like Americans for Generational Equity (AGE). Their story was that the old were getting too much of the pie at the expense of the young. Of course, the real story is not the disparity between old and young but between haves and have-nots of all ages.


The problem is not that the old get too much but that too little of society's necessary caring, for both the dependent very young and the very old, is financed socially. Working families need high-quality child care, as well as generous paid parental leave so that parents themselves can do more of the caring. People approaching retirement age likewise must be assured that if they have the bad luck to need institutional long-term care, decent provision will be made. And those who do paid work--whether as child care workers, direct-care workers in nursing homes, or nurse's aides providing care at home--should be treated and paid as professionals.


A social-insurance budget for caring would make America a much more decent place. And it would build one potent progressive coalition around the basically middle-class values of family and living-wage work. Gentle reader, America could actually afford this program. The only thing that stands in our way is the lunacy of a massive tax cut.


On this issue, public opinion is on our side and there is a majority politics in waiting. What's lacking is liberal leadership not cowed by tax-cut fever and debt-pay-down blather. Voters care about care. Do leaders?

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