Washington's poorhouses live on only in the name of a dive bar just blocks from the Capitol -- congressional staffers frequently imbibe at the "Pourhouse" on Pennsylvania Avenue -- but the rhetoric targeting their one-time denizens has survived to the modern day unscathed. Georgia Republican Rep. John Linder said during a hearing this summer that "even when businesses are willing to hire, nearly two years of unemployment benefits are too much of an allure for some ... The evidence is mounting that so-called stimulus policies rammed through Congress are doing more harm than good." Orrin Hatch attacked outdoor relief when he proposed this summer that the government drug-test the unemployed because "we should not be giving cash to people who basically are just gonna blow it on drugs." Newt Gingrich wants the unemployed to undergo job training to get benefits.
The welfare queen of the 1980s and '90s, and the "99ers" today -- people who've exhausted 99 weeks unemployment benefits, who Beck says his viewers should be "ashamed to call ... Americans" -- were the "gentlemen of leisure in the gutters" in the 1870s, as the New York Tribune put it.
Abetted by journalistic exposes of poorhouse squalor, progressives managed, by the 20th century, to reform the poorhouse into a kinder and more accommodating institution than its Dickensian forebears -- too accommodating, according to some Republicans at the time.
At the turn of the century, Congress did precious little to alleviate poverty. Other than funding pensions provided to Union veterans, the bulk of the congressional anti-poverty effort involved funding poorhouses in the capital with an appropriation that amounted to $13,000 in 1897.
Ohio Republican Stephen Northway quizzed Capt. L.B. Cutler, superintendent of D.C.'s Municipal Lodging House, during a hearing in 1897 about the comings and goings of unemployed single male inmates from one poorhouse to another along the east coast.
"It is amusing, when they get together in the yard, to listen to them talking and telling about this place and that one," Cutler said.
"Much charity to them is a harm," Northway said.
"They are human beings, and we have to take care of them, but it is outrageous to think that they get off as easy as they do," Cutler said. "At the workhouse they are treated very kindly by the man in charge there. He feeds them too well. If they were fed sparingly they would not go there."
Ultimately, outdoor relief for the elderly and the temporarily jobless has prevailed (the handling of non-elderly poor people is another question). President Obama often references the initial passage of Social Security when justifying his administration's compromises, insisting that if liberals held to their principled position and refused to negotiate, Social Security would never have become law. In December, arguing on behalf of extending the Bush tax cuts for the wealthy, he said that "it's a big, diverse country and people have a lot of complicated positions, it means that in order to get stuff done, we're going to compromise. This is why FDR, when he started Social Security, it only affected widows and orphans." Obama had made the same widows-and-orphans claim earlier to defend compromises in his health care reform law.
Obama has the details of his history wrong -- widows and orphans came later, not first -- but he also has it wrong in general. In 1935 the House and Senate met to conference the two separate versions of the bill. Neither bill covered every worker -- some are still exempt today; others, such as farm workers, have since been covered -- but the most critical difference was over a carve-out that private pension companies had demanded: If a company offered its own pension, they reasoned, they should be exempt from participating in Social Security. FDR and the House argued that such a carve-out would undermine the universality of the program and encourage companies to offer lousy pensions to get around the law, plans that wouldn't be guaranteed to be around when the retiree needed them and would have little protection against the vicissitudes of the market, as Social Security would.
The Senate also made a straightforward argument that Obama would well recognize: We don't have the votes, the chamber's leaders told the president. It's our way or nothing. For nearly a month in the summer of 1935, FDR stared the Senate down, refusing to accept its offer. He used every lever at his disposal. The president won; the Senate blinked. It's a different story than Obama tells.
Obama's confusion about Social Security's origins would seem mundane if it weren't for the payroll tax holiday he pushed, the deficit commission targeting Social Security he created, and the reports that he'll call for cuts to the program in his State of the Union address.
Social Security reform is necessary, the program's opponents say, because its future solvency is in question: As a result of the Baby Boom and advances in medicine, more people are living longer. But the actuaries who set up Social Security in the 1930s forecast with an eerie exactitude how much life expectancies would increase -- a detail that is always ignored. And the system was reformed by the Greenspan Commission in 1983, when the first Boomers were nearly forty years old. Nancy Altman, a boomer herself, served as a top aide to that commission, and said that it very specifically took into account the coming wave of retirements, which explains why it can pay full benefits through 2037, a quarter century after the first Boomer hits early retirement.
Social Security's actuaries reported this fall that after 2037, payroll taxes would be sufficient to pay nearly four-fifths of benefits through 2084. The payroll tax stops, however, at a little over $106,000. The shortfall could be made up entirely by applying the payroll tax to more income above that threshold.
Instead, President Obama's deficit commission proposed reshaping the payout structure in a more progressive direction, which would fundamentally change the nature of the program. Pundits such as The Washington Post's Robert Samuelson have long been arguing that the program should be more like welfare and that wealthy old folks should have their benefits withheld. But the cost of administering such a program, auditing it and making sure it's not being gamed would erase the savings associated with it, as well as undermine the element of the program that has made it so successful. Social Security has been an impregnable fortress because people feel ownership of it. It's their money. They earned it.
Obama's deficit commission failed to get the 14 of 18 votes necessary to move forward, but Senate Majority Whip Dick Durbin (D-Ill.), a White House ally, voted for it in a gesture that portends its future legislative revival. Durbin, said two sources, has since met with a bipartisan group of senators planning to introduce their own deficit-reduction plan, modeled on the commission's report, that they hope to attach to must-pass legislation to fund the government or raise the debt limit this spring. The gang includes enough Democrats to give their effort a solid chance of becoming law. Among them: Jon Tester, Ron Wyden, Kay Hagan, Mark Udall, Michael Bennet, Jean Shaheen, Amy Klobuchar, Bill Nelson, Dianne Feinstein and Mark Begich.
Top House Republican aides told HuffPost that leadership is planning to use the debt-ceiling vote -- when Congress must authorize the Treasury to issue more debt to pay its obligations or go into default -- to demand major cuts in spending. Lamar Alexander, the Senate's number-three Republican, said that the party will use the looming expiration of the payroll tax holiday to demand changes to Social Security. "My personal hope is that it doesn't become permanent unless we deal with a way to make Social Security solvent over the long term," he told HuffPost. "You have to remember, the payroll tax funds Social Security and I like the idea of a lower payroll tax contribution, but we've got to make sure Social Security is solvent, which we should be doing this next year as the first order of business." Making Social Security "solvent" with less revenue coming in necessarily means cuts in benefits.
In the meantime, people are limping across the finish line. Home values and the retirement security that came with them have plummeted, along with IRAs and 401(k)s. Pension plans are struggling and laid-off, middle-aged workers have pulled hundreds of millions of dollars from retirement savings to pay bills -- often taking brutal tax hits that come along with such withdrawals. The number of people filing for reduced, early Social Security benefits jumped by 25 percent in 2009. That under such circumstances the political class is leaning toward cutting Social Security is evidence of where its power base resides.
Karen Good, who lost her job at a nonprofit in Florida two years ago, exhausted her 99th week of unemployment insurance on Dec. 1, utterly unable to find work. "I'm not a super political person, but I've sort of become one because I need the government now more than I ever have in my life," she said. On Tuesday, mercifully, she turned 62, which makes her eligible for early Social Security benefits. In February, they'll kick in, and she'll start drawing $1,113 a month. It won't come close to replacing her lost income, but it's something.
"I haven't been a proponent, a fan of Social Security for the past 45 years. When I was younger I always felt I should have the option to put my money into an account," Good told HuffPost on her birthday, scoffing at the suggestion that she might be grateful for the money. "I get my money back," she said. "I earned it."