john followed by the british house of commons. embers of the british parliament react to president trump's retweet of anti-muslim videos. ♪ >> this week on q&a, hoover institution senior fellow john cogan. he discusses his book, "the high cost of good intentions." the history of the federal entitlement programs. oft: author of the -- author "the high cost of good intentions." when did you get interested in entitlements? it started during the

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. host: how long were you there? john: i was there for three years. i served prior -- prior to that at the department of labor. i left omb in the mid-1980's, there returned in 1988 to serve as the deputy at omb and return to stanford. lessons thatre the 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. 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. surprise ingest your book was fdr. tell that story. think that thele 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 400,000, mostly world war i disabled veterans from the rolls. he reduce the veterans compensation by 50%.

extraordinary change in the whole history of entitlement programs. what was interesting about it was the way that he went about it. werehe entered office, we 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 programst -- veterans if it would control spending. office,ys after taking he asked congress for the authority to modify all veterans entitlement programs. 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 set that if it 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 roosevelt's action was fact he tookhe 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 thought modify, 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 10-15 years down the road. they wanted that bonus payment now. bonus paymente now. they washed -- they marched washington in 1932. they gathered in pentecost df and set up tents. 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 to bonus marchers. it was a very large scandal in american history. one group of american soldiers

sold out a group of american veterans from the nations capital. host: anybody killed? john: one individual i believed was killed during the action. thene bonus marchers returned in 1933 to protest against the proposed reduction and to claim their promised benefits. roosevelt was very different. his solution was to send eleanor out to the camps and have her sing songs and listen to the veterans, and sympathize with then. -- with them. she also offered them jobs. 25 thousand 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 his regulatory changes. host: the economy act of 1933 was what?

what did that do? repealed allrally federal entitlement programs for programs.ompensation it repealed the entitlement of veterans had to world war i, , rebellionbenefits benefits, spanish-american 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. beforeou say the night it was introduced he had his first fireside chat. he had 30 some like twitter in those days. here is an excerpt of fdr. 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 its use of arrival system. host: what is he doing here? speech he washat tackling the main problem as he sought with the private financial system, which was the banking crisis. we have so many banks. 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 widely popular. under the senate rules, in order to vote on the 3.2 beer proposal, they had to first dispense with the economy act. 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. as you say, 400,000 vets will the latter get their pension benefits. let me go to the point of your book. what is in entitlement? question. is a good the word entitlement has come to mean many different things to

many different 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 in a , as something that can be taken away and something that is not really deserved and is distinguished benefit,arned right like social security. people on the latter group save 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 pre-specified eligibility rule in law, then you will be guaranteed a benefit

under the law. host: how much has war in our history created the need for entitlements? john: i would have to say, in the ninth -- 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. host: you are saying it was disability at first, but then it spread to people who just where 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. common among all entitlement programs. basically i will describe in general. what happens when an entitlement program is created, the is a veryy pool narrow group of particularly worthy people that are usually deemed to be eligible for benefits. time, a group that is 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.

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. 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. theyhen 20 years later wanted to include members of the state militia. volunteers, these individuals were no less deserving of the systems as those in the continental army. the 1830's, congress had

extended the program to include anyone lead served in a revolutionary war for at least nine months. 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 those that had been disabled during wartime service. 30 have been 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. in your introduction, you a 55% of all u.s. households received cash or assistance from at least one major federal entitlement program, let me read on.

households of people under 65, over 40% received title embedded -- benefits. 85% of households by a single mother received benefits and nearly six out of every 10 children received, 58% are underg up in a family entitlement rolls. how long has it taken us to get to 55% of all households receiving something? john: about 70 years now. entitlement programs begin with good intentions. the intention there is to -- is to- is to prep 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 rejection against poverty for those who cannot provide for themselves. these are goals everyone in america shares. is describedoday with those statistics from the book is a system that does not bear any resemblance to those a sick goals. that is the nature of the growth of entitlement. that is why we have a problem today. fdr, here is more from beautiful black and white done by the minneapolis pbs station. it suggest he is making fun of the republican. >> we believe in social security, we believe and work for the unemployed, we believe in saving homes. across 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 themtantly, the doing of will not cost anybody anything. [applause] host: sounds a little familiar. but a masterful politician. that has been the promise of those that got entitlement. you can have it, i will give it to you and it will not cost the country a dime. 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 toublicans used pensions gain an electoral advantage. in fact, the pension program behindrealign the public the republicans during the 1890's. 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. thehe modern era we see same phenomenon, except the parties flipped. the democrats have been the proposers of all the new entitlements and the republicans ,ave stood in opposition initially. once they have guinan to power

after an entitlement has been commuted, they have generally supported the expansion of those entitlements. host: we have some video on both side showing, but on the one hand, then several years later on the other hand. let's 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. --ry: today the president 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 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. the first time george bush

was in office, and the second time he was not. 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. >> if we fail to put our budget on a sustainable path, and we to worlding decline power. the unsustainable trajectory of government spending is accelerating the nation towards the most predictable economic crisis in american history. prepared to say that you are insisting on reverend a neutral 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. host: what are we supposed to believe, who and when are we supposed to believe? john: consistency has never been

a hallmark of members of, -- congress. -- members of congress. than a far larger problem any single member of congress. it is a problem with the institution, it is a problem with it 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 sow it harry reid are just examples of how individuals react to those pressures, pressures to be reelected. host: go back to your government experience. what were the first years that you are there? in 1982.1 i was assistant secretary at the labor department. host: what was your big take

from that experience? john: it was just how difficult lay in these entitlement programs. 1981 and 1982 were years of a very, very deep economic the federal reserve and administration tried to ring administration 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 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. this was a cry for reagan to stay the course and that meant to keep those tax rate reductions that you had put in place and keep those budgets savings that you have put in place. do not give up on them. i think reagan was very, very strong and not giving into those pressures that were operating at the time. host: who was your secretary of labor? john: it was a wonderful man, raymond j doniphan. a terrific young man. actually, a middle-aged man who is treated very, very badly by washington. as you may recall, ray, after serving for almost four years as secretary of labor and undergoing an anonymous 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 old 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. is the am not sure this exact quote, but my memory was, he said, where do i get my good name back? john: that is right. 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 you're 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,. i would say this, it yes there in republic services washington, but i would say tnp but, do not allow that risk to deter you 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. believe that young people should experience the same, and do the same and try to do something good for their country. host: what was the second time you are in government? i moved from the labor department to omb and i was at omb for 3.5 years. i had most of the entitlement programs under me. then i left washington and came back in 1988 as a deputy. host: so you were in the ronald reagan administration. 1980 and wasn still ronald reagan. when did you leave government forever? john: i left in the spring of 1989. ont: did you have any impact reducing the entitlements when you were the deputy, or even before that? john: very, very little. very little. this society of a mind

that, it should not just be 55%, maybe it should be 75% of entitlements. john: yes. were some successes. entitlement spending under the reagan administration was not cut by normal accounting. what we did was slow the growth. the growth was slowed by about 50% over the eight years. so, there was an accomplishment there. but the programs remained in place when ronald reagan left office, then, since then they have grown back. the reduction, if you will, and the growth spending was really just a temporary reduction. we heard about all the time. isn't that just a gimmick politicians use about the growth? john: let me ask you this -- host: let me ask you this. dick cheney said, who cares about the debt?

so are we just going to jack -- keep jacking bit debt up to $20 trillion as we have it now? john: history teaches us that excessive debt will eventually cause a financial crisis. history does not provide us with much of a guys about which point how high that debt will be before the crisis hit. it's go back to germany, it is a very good example of where they had an enormous debt problem after world war i. they chose to deal with that debt problem with inflation and wasgerman hyperinflation one of the most extraordinary economic events of the 20th century. it practically ruined the economy and led to the rise of not see his them. some very severe consequences. -- nazism. some very sick with -- some very

severe consequences. we justit will occur, cannot say when and we don't know how severe it will be. crisis8, 2009 financial should be a good lesson for people there thinking about the consequences of entitlement programs. officials did not see the great recession of the great financial crisis coming in 2006, 2007. wall street did not see it. for a few people saw that crisis coming. all of a sudden it was upon us. that crisis was driven by excessive wall street debt. that lostonly people were sabers. if you were in the market and stayed in the market it went from 5800 up to 23,000. people that do not make a lot of money cannot save a lot of money and even those that want to save money cannot make it dime. the consequences of that

economic crisis are present today. the low interest rates we have in the inability of people who have prepared for the retirement . they are suffering from the consequences of that economic crisis. think about it. that economic crisis was really generated by one sector of the economy. public debt crisis that brought isby the federal government a far bigger crisis with far bigger ramifications. as severe as the 2008, 2009 recession was, the consequences of not feeling what entitlement was is far more severe. politicians on both sides talk about the middle class. they want to help the middle class. lived a longave

time cannot save and make any money. iny are actually punished this process. they have been punished but nobody ever talks about that. john: that is exactly right. it is extraordinary -- it it is an extraordinary phenomenon. wage earners have received very little in the form of wage increases. retirees have been able to earn only returns on safe investments. they have been able to go into the stock market at great risk and earn something there, but by and large the great part of the forle class has been paying the bad economics that we followed in the great recession and the period leading up to the great recession. brian: you are talking that politicians that make the decisions on entitlements have good intentions, but you also say it is an electoral decision,

a political decision. two?w do you mesh those i am doing this for the people and i have good intentions, but i am also doing it to get reelected? john: entitlement programs stem from a basic human desire to help someone who is in need of assistance. it is just common. all of us have it in us. for politicians it is a little easier. of course, it is somebody else's money. but they still have that same basic desire that you and i do. they also have this desire to be reelected. once that entitlement is put in place, then the game has changed. interest groups form around protecting that entitlement, pressing for more assistance. money starts flowing to politicians who protect those benefits, and the game changes.

it is that desire for reelection that drives a lot of entitlements. brian: but how difficult is that for somebody to give someone else's money away? john: it is pretty easy. that is why they do it. brian: and then they get praise and voted back in from their constituents. now, and this period this was recorded before any decision was made on the tax bill, where you got to keep your eye very closely on what is going on. john: you absolutely do. i would say this about the tax bill if i could. the way i think about the entitlement problem is we have to reform these entitlements clearly to make them affordable. but if we can get economic , we willronger, faster increase the amount of resources that are available to financing those entitlements. it will lighten the burden of financing those entitlements a little bit. so when people think about

solving the entitlement problem or our debt problem, i think economic growth the lungs very importantly in that equation. brian: what if you don't get it? john: we are in real trouble. who is the mulvaney, office of management at director, was very much against not paying off the debt, and now he is in charge. let's watch this. [video clip] >> i do want a balanced budget. we have got to start balancing budgets. these people are starting about balancing budgets 35 years from now. we can do it, believe me, much quicker. we can do it quickly. he even made a pledge to get rid of the debt in eight years. so the goal is to have a balanced budget within 10 years, but basically that means you

will add to the debt every single year in the next 10 years. brian: why is it that in every political campaign, promises are made and they never, ever do what they are promised to do when it comes to the debt? john: it is really sad, isn't it? brian: what are we supposed to do as voters? john: the political climate right now is really not at all conducive to any kind of cha nge in government spending. i don't think we have any good sense of how to get it done. i think washington really needs to step back and take a long look at how they have handled entitlements and government spending. it is really a very unfortunate circumstance, and quite honestly you go back and look at history, it really doesn't give you much reason for optimism. brian: you say in your book it is going to take a crisis.

john: i think it probably will take a crisis. hopefully we can begin to address the problem before we get to that crisis point. brian: here is richard nixon the in 1968 talking about public and what they really want to feel when it comes to money and whether they want entitlements or not. [video clip] nixon: government can do a lot of things for men. it can provide him food and a house. it can provide him clothing. but it can't provide him dignity. it can't provide him pride. it can't provide himself respect. brian: is that still true? john: i don't think people should look to government for pride and self respect. i don't think people should look to government for benefits. i think we need to look at ourselves for our pride, for our dignity. i think we need to rely on our own initiative, for our food and

for our shelter and for our children. brian: what did that president do for entitlements? john: most people think of richard nixon as being a conservative. i argued in the book that richard nixon was every bit as expansionary when it came to domestic spending in particular entitlements as his predecessor, lbj. i labeled a chapter on richard greats presidency as society two. lyndon johnson's great society, we saw the enactment of medicare and the medicaid program, two very large entitlement programs. wasmostly the great society

increasing what we think of as discretionary programs. programs for education, training, a large number of social services, where the money went directly to cities and interest groups in the cities. richard nixon was a little different. richard nixon did not expand programs that much for education and social services, but he did expand entitlement programs tremendously. and that, he created a federal unemployment insurance program. in a nationalized the food stamp program, which was a very small program when he took office. he created the supplemental security income program, which establishes a federal floor on income for the disabled and the poor elderly. he was a very big entitlement expander. farther -- moved on or try to go farther -- but

congress would not go along. the proposed the national health insurance plan very similar to the affordable care act, and he of thed federalization entire welfare system, which congress did not go along with. so richard nixon ranks right up there along the top entitlement expanders of any presidents in modern american history. brian: originally when medicare was passed, what did they expect to happen, and where were the republicans when that vote was taken? john: the republicans had imposed the enactment of medicare all the way through the 1950's and the early 1960's, as did the southern democrats who controlled the relevant committees in congress. and then with lyndon johnson's sweeping victory in 1964, the southern democrats came along to support medicare, in particular , andremove -- wilbur mills

a handful of republicans joined in support of an acting medicaid that ended up passing -- i'm sorry, medicare. after that initial opposition, however, the republicans have in the intervening years supported expansions of the medicare program, as have democrats. and that is really a very typical phenomenon during the post-world war ii era. --itlements in acting entitlements and acted by democratic administration, then republicans get in power and those entitlements are continued and opposition by republicans turns to support, and the entitlement grows. a good example of that would be the prescription drug benefit under president george w. bush. brian: pulled it there. let's go to -- hold it there. let's go to video of george w. bush in 2003.

a lot of people said this was in anticipation of the 2004 election. let's watch. [video clip] bush: in a few moments i will have the honor of signing an historic act of congress into law. i am pleased that all of you are here to witness the greatest advance in health care coverage for america's seniors since the founding of medicare. [applause] brian: how much did that help him in the next election? john: hard to say. i honestly don't think it helped very much. i think they thought it would at the time. when that idea was originally developed, it was in 2001. in 2001 the budget was in large surplus. and of course, there is nothing to stimulate interest in expanding entitlement as much as a government surplus.

momentum for this prescription drug benefit got the early part of the administration, well before this. brian: you say in your book that when the surplus occurs, they spend. john: that is exactly right. for people today who haven't seen a budget surplus in 20 years, it doesn't seem relevant, but throughout history, whether the surplus is in the budget as a whole or the surplus is in a special account like a social security program or special trust fund, every time there is pressures to expand entitlement gets magnified, and congress will eventually spend the surplus to expand entitlement. the problem is many of these surpluses are generated by an upswing in the business cycle. economic times get good, revenues or into the treasury or social security system, and a

surplus or a big balance builds up. but that balance or surplus is only temporary. eventually the economy is going to go back down to normal and maybe into a recession. but congress has taken those surpluses and and acted -- and enacted a permanent expansion in entitlement in response to the surpluses. so it ends up being more of a permanent increase and you get deficits. brian: if i said i want to get a camera crew and you, and lets go show the public where the social security trust fund is, where the money is come where the certificates are, where would we go? john: you and go to parkersburg, west virginia. the story of the creation of the physical representation of the trust fund is a very interesting one. throughout the 1980's and early 1990's, the social security

system, because of the growing economy, developed about $1 trillion in surplus funds that was allegedly sitting in this account. members of congress would go back to their districts for their town meetings and people would ask, if there's $1 trillion there and the social security trust fund, where is that trust fund? the members didn't know because there wasn't one. in thejust a ledger treasury department book. so they came back to washington demanding that their leaders do something. there is a very ingenious congressman, a democrat from , and he had the terrific idea to create a physical representation of the trust fund. they passed a bill that would designate a public building as the location of the social security trust fund. brian: is this a joke? john: no, this is the honest to god truth. so theythe bill passed, set aside a building in

parkersburg, west virginia as a bureau of the public debt building to house a file cabinet and a computer to be the trust fund. the computer would print out certificates that represented surplus revenue and interest came in, and some government official would sign it and stick it in the file cabinet. brian: where is the money? john: the money was sitting in the united states treasury, ready to go out in the form of a payment to a defense contractor or a contractor in the education department. -- it comesoney is into the treasury, goes out of the treasury. brian: what happened to the idea of creating a trust fund, keeping the money there, and spending it on retirees? john: it was a grand idea, roosevelt's original idea that social security should be self-funded. social security should be a

program whereby the individuals pay if the program and the funds are set aside and able to fund their retirement benefits. ,he reality is, in the 1930's once that surplus started getting built up, congress realized, my gosh, it is a --eypot waiting to be rat waiting to be raided. and they moved to a system where you pay as you go. brian: as long as we are devout about west virginia, what is the story of the coal miners and robert c byrd? in 1969, it is a good example of how little infants can sometimes create a big -- little events can create big entitlement programs. there was a coal mine disaster in farmington, west virginia.

were killed in this accident, and it generated a response in washington to regulate the coal mines. i think it was a sensible law to regulate the coal mines. andin the process, mr. byrd other members of congress decided it would be a good idea to compensate coal miners for black lung disease that they might incur from their years of working in the coal mines. the opponents argued that this should be a workers compensation benefit to be handled by the states. mr. byrd and others argued, but there is none. we need a temporary program. so they enacted a temporary black lung benefit program that entitled coal miners to a monthly disability payment. it was only a temporary program. but of course, several years later when the authorization of

that program was about to expire, congress looked around and no state had adopted a worker's comp. program for their coal miners, so they said, we need to continue this, and they then reauthorize the program. the program is still around today. it has achieved virtual immortality, in the words of ronald reagan. brian: we have been all over the place, but i want to ask you about this book. if somebody wants to read it, what will they learn that we are not talking about? john: what they would learn is that the history of entitlements and the behavior of entitlements that they see today goes back a very long time, and that the forces that are at work on congress and on the executive to expand entitlements are forces that are very powerful. they need to be recognized. they need to be dealt with.

and hopefully when leaders understand the nature of what drives these entitlements, we will all be in a better position to come up with some lasting and effective changes to make these entitlement programs more affordable. brian: is it possible? john: i believe it is. brian: what gives you a sense that it is possible? john: i tend to be an optimistic guy. i realize there are very few historical reasons for optimism, but america has faced all kinds of difficult problems in the past. there have been tremendous challenges that we as a country has faced. this entitlement problem is of a different sort that our problems in the past. but we have risen up in the past to solve them, and i think we would do so here. brian: what percentage of the budget is entitlement oriented? 2/3 of the now it is budget. brian: what would have been 150

years ago? john: it would have been about 10%. but the civil war pension program, as we talked about, was one of the great entitlement programs of the 19th century. that drove entitlements up to theof the federal budget in 1890's, 30 years after appomattox, and it eventually then died down as the soldiers of the civil war eventually passed on. brian: where would you put today in relationship to our 200 year plus history? john: for the last 70 years since the new deal, entitlements have been growing and growing relative to the economy. a larger and larger fraction of our goods and services are being transformed into entitlement benefit that go from one group in society to another. brian: but isn't that good for the society, the people that are out in the united states now

have more money than they had ever had if the entitlements have grown? john: absolutely not. entitlements come from one group in society and are given to another group. brian: but they are the privileged, the ones that make all the money have to give the other side some money. john: now you are raising a good point. we think of entitlements as mainly programs to alleviate poverty. minorityty is that a of the dollars we now spend through entitlements go to alleviating poverty. my calculations are only about 1/5 of the $2.4 trillion of entitlement spending actually goes to alleviate poverty. 1/5 of the $2.4 trillion every year -- john: -- go to alleviating

poverty. the rest goes to people who were not in poverty to begin with or two people who have already been raised out of poverty by other entitlement programs. brian: but somebody is watching right now and saying, look him up i have paid into social security and medicare. don't tell me i don't deserve that back. john: and i would say to them, as far as social security goes, yes, you have paid into social security, and i can understand your desire to get your money back. but you have to remember that the reality is that money that you put in has already been spent. the money that is going to finance your benefits -- and you have in some sense earned them -- that money is coming from the pockets of workers in their 20's, 30's, and 40's. brian: but that is not their fault. john: it is not their fault at all. it is just the reality. and it is something we need to keep in mind for retirees today.

you may have earned your that is, but a person now being asked to pay for that benefit is a person who is in their 30's or 40's and working a job, trying to build a family, save for their own future. that is who is paying for your benefits. brian: i remember a figure in aur book you say a family of husband and wife after 65 will collect as much as $1 million apiece and social security money. john: just about. brian: to how many pay in that much? a typicalfact is that married couple who reaches age 67 this year will receive in medicare and social security benefits, both combined, about $50,000 a year. that is almost equal to the median household income in

america today. so over the remainder of their lifetime, their benefits are orng to grow with inflation faster than inflation for medicare, and they will receive about $1 million in inflation-adjusted dollars over the remaining lifetime. in 1972 -- and the story of it is a very interesting one and illustrative of congress' inabi lity to grapple with these entitlement problems -- it began with social security benefits to compensate recipients of the inflation since the last benefit increase. at the time, social security benefits were not indexed to inflation.

congress would regularly increase compensation payments on an ad hoc basis. inflationly 1970's, fell on, they were considering a 10% increase in the spring of 1972. four democrats were vying for the nomination of their party for president. will work -- wilbur mills, george mcgovern, hubert humphrey, and edward muskie. muskie proposed a 15% increase. mills threw his hat in the ring with a 20% increase, and followed by mcgovern with a 20% increase. hubert humphrey upped the ante, proposing a 25% increase. eventually the senate started looking for a vehicle with which they could attach an increase

to. then frank church came along and said we can do it 20% increase on the debt ceiling bill. it was a bill is expected to be necessary by july 1. the debt ceiling was to expire on june 30. so the senate in the late evening of june 30 passed its version of the debt ceiling bill with a 20% increase in social security benefits on it. the bill went to the house just before midnight. the house had no other choice and passed the bill. brian: if they raise the tax rate at the same time on social security? john: no. in fact, they changed the assumptions about economic to finance the higher benefits. the increase to the assumed growth rate, bringing more a rollback to revenues, and that would finance. inin the same bill, they put

a cost-of-living adjustment, a permanent cost-of-living adjustment. they wouldn't be every two years in acting and -- two years enacting and ad hoc increase. turns out they made a grievous ther and over indexed inflation, which they eventually fixed. out they were year in, year passing benefit increases usually in an election year and usually more than enough to compensate for inflation. at the end they said, we are going to stop ourselves before we spend again with this automatic -- brian: it seems like you are saying all of these gentlemen are gone. they are dead. they got this opportunity to say, i am going to increase it. they are gone, so when it all falls apart you can blame them, but they are gone.

to 30-year-olds today are the ones that are going to pay the price. john: that is exactly right. politicians,oday's we have to figure out a way to make sure those politicians through feel the heat younger individuals that are not going to receive what their elders have. brian: how long have you been at the hoover institution? john: i have been there except for my washington service since 1979 in stanford, california. thatoal is a set of ideas define a free society. i went to ucla for my undergraduate and graduate, a phd in economics. my hometown is in california. brian: you have a family? john: i have a beautiful wife and we have raised six children together. they are in their 30's and late 20's. we just had a wonderful event.

our youngest was married a month ago, and of the same day we had our first grandchild. to different kids involved here. a very fine day. brian: on that note, let's put the book cover on the screen. it is called "the high cost of good intentions, the history of u.s. entitlement programs." are just -- our guest has been john f. cogan. thank you for joining us. john: thank you very much. appreciate it. ♪ [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2017] announcer: for free transcripts or to give us your comments about this program, visit us at

qanda.org. they are also available as c-span podcasts. announcer: here are some other programs you might like. the president of the committee for responsible budget talks about her expectations for congress and president trump. dr. mark mcclellan on his career at the centers for medicare and medicaid services. and david stockman, former director of the office of management and budget, talks about his book, "the great deformation." you can search our entire video library at c-span.org. c-span's "washington journal," live every day with news and policy issues that impact you. coming up monday morning, associated press white house reporter ken thomas and the hill

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during the week, both the house and senate are expected to vote on a short-term spending bill to keep government funded until december 22. watch the house live on c-span, the senate live on c-span2. the britishext, first secretary of state stood in for prime minister theresa may during this week's question time. than the prime minister, home secretary, and members of parliament react to president trump so we treat -- president .rump's retweets then john cogan on a federal entitlement program. announcer: britain's first secretary of state stood in for the prime minister in this minister'se questions, answering questions on brexit negotiations and strengthening the complaint process for sexual harassment and violence claims.