QUESTION: What’s an Entitlement?

 

ANSWER: Federal budget lingo can get confusing and nowhere is that more apparent than with the term “entitlement.” People well-versed in budget parlance take it for what it is: a technical term to describe a certain category of federal spending. Others, however, take it as a pejorative way of describing certain social insurance programs, most notably Social Security and Medicare, as “welfare” programs.

It is not unusual, therefore, for people to confront politicians or commentators who refer to these programs as “entitlements,”  with questions such as “Why do you call Social Security (or Medicare) an entitlement? We paid for it.”

Some entitlements are indeed tied to dedicated revenue sources such as payroll taxes and premiums. That fact, however, does not affect a program’s status as an entitlement. 

The Congressional Budget Office (CBO) defines entitlements this way:

A legal obligation of the federal government to make payments to a person, group of people, business, unit of government, or similar entity that meets the eligibility criteria set in law and for which the budget authority is not provided in advance in an appropriation act. Spending for entitlement programs is controlled through those programs’ eligibility criteria and benefit or payment rules. The best-known entitlements are the government’s major benefit programs, such as Social Security and Medicare.

A similar definition is contained in the U.S. Senate’s glossary:

A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.

These definitions make clear that it is the eligibility criteria and binding obligation to make payments that determine whether a program is an entitlement, not its source of funding. Social Security and Medicare meet the definition, as do means-tested programs funded by general revenues such as Medicaid, Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP).