This Week In The War On The Safety Net


The American social safety net is back in the news, and not just because Mitt Romney acknowledged, "I'm not concerned about the very poor." This week, the libertarian Mercatus Center at George Mason University revealed that a third of Americans now receive Medicaid, food stamps or other means-based government assistance, a number that climbs to 148 million when Social Security, Medicare and unemployment benefits are factored in. The next day, the conservative Heritage Foundation fretted that its "Index of Dependence on Government" rose 8.1 percent last year. Then on Sunday, the New York Times detailed that the so-called safety net now delivers most its benefits to middle class Americans, including many who denounce the very government programs which now sustain them.

But while the torrent of new reports provides fodder for partisans of all stripes (myself included), the picture of the frayed U.S. safety net is a complex one. What conservatives routinely decry as government largesse for the undeserving poor is a hodge-podge of programs which increasingly support the middle class and, above all, the elderly.

Here, then, are five things I found caught in the safety net.

1. Universal Programs vs. Means-Tested Benefits

Eager to reinforce their narrative, conservatives tend to play fast and loose with what's actually in the safety net. As this Politico summary of the Heritage Foundation 2012 government dependency index shows, safety net critics intentionally conflate universal programs like Social Security and Medicare with means-tested aide like food stamps, housing assistance and welfare payments:

Since the 2008 index, the American people's dependence on government has grown a whopping 23 percent.

One in five Americans -- or slightly more than 67 million -- now relies on federal assistance...Overall, about 70 percent of the federal government's budget is directed to individual assistance programs. And nearly half of the population, or 49.5 percent, don't pay any federal income taxes, according to the survey.

Of course, virtually all working Americans pay Social Security and Medicare payroll taxes; programs whose growth accounts for most of the expansion of federal domestic spending. Since 1965, Social Security and Medicare have helped reduce poverty among the elderly by two-thirds. (Just as important, bipartisan support for the Earned Income Tax Credit and other tax credits have trimmed the numbers of working Americans who owe Uncle Sam each year.) That's why it was so refreshing to see at least one right-wing blogger react to Sunday's New York Times piece by complaining, "Wait - Medicare is now a "safety net" program? I thought that, like Social Security, it was an earned benefit - we all paid our taxes, and we are all eligible."

2. Complain and Ye Shall Receive

To be sure, the conservative commentariat is none too happy to see The New York Times once again highlight the hypocrisy of government spending critics happily (or often, unknowingly) receiving payments from Washington. For example, there's the case of Ki Gulbranson, a Minnesotan who earns $39,000 a year and, The Times claims, "wants you to know that he does not need any help from the federal government":

He says that too many Americans lean on taxpayers rather than living within their means. He supports politicians who promise to cut government spending. In 2010, he printed T-shirts for the Tea Party campaign of a neighbor, Chip Cravaack, who ousted this region's long-serving Democratic congressman.

Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.

Gulbranson has plenty of company within the ranks of the Tea Party. 2009 data from Public Policy Polling revealed that while 39 percent of all Americans responded that the government should "stay out of Medicare," 59 percent of self-identified conservatives and 62 percent of McCain voters hold that oxymoronic view. As The New York Times reported on its joint survey with CBS of Tea Party members in April 2010, "Despite their push for smaller government, they think that Social Security and Medicare are worth the cost to taxpayers." 62-year-old Tea Party supporter Jodine White acknowledged to The Times what her desire to slash government spending would produce:

"That's a conundrum, isn't it? I don't know what to say. Maybe I don't want smaller government. I guess I want smaller government and my Social Security." She added, "I didn't look at it from the perspective of losing things I need. I think I've changed my mind."

3. Red State Socialism is Alive and Well

In defense of Mr. Gulbranson and Ms. White, large numbers of Americans are largely unaware of what some have called "invisible" government programs whose benefits they often receive. As Ed Kilgore pointed out in the Washington Monthly, "The fact that nearly half of Social Security recipients do not believe that they have benefited from a government social program, and that the same is true of some 40 percent of G.I. Bill beneficiaries and Medicare recipients is a rather extraordinary one."

That lack of awareness of how the federal government spends — and who receives — taxpayer dollars includes the phenomenon of "red state socialism."

As a 2007 analysis of FY 2005 federal spending per tax dollar received by state shows, the reddest states generally reaped the most green. Eight of the top 10 beneficiaries of federal largesse voted for John McCain for President. Unsurprisingly, all 10 states at the bottom of the list — those whose outflow of tax revenue is funding programs elsewhere in the country — all voted for Barack Obama in 2008. As Paul Rosenberg demonstrated, net beneficiary states similarly voted for George W. Bush in 2000 and 2004.

As The Times explained, the one way flow of federal tax dollars from Democratic-voting states to Republican ones has been a feature of American politics for years:

Dean P. Lacy, a professor of political science at Dartmouth College, has identified a twist on that theme in American politics over the last generation. Support for Republican candidates, who generally promise to cut government spending, has increased since 1980 in states where the federal government spends more than it collects. The greater the dependence, the greater the support for Republican candidates.

Conversely, states that pay more in taxes than they receive in benefits tend to support Democratic candidates. And Professor Lacy found that the pattern could not be explained by demographics or social issues.

4. A Trillion Dollars in Tax Credits

As it turns out, the Mr. Gulbranson profiled in The New York Times exposé could be the poster child for the Heritage Foundation's "dependents," that "half of the population [which] pays no federal income taxes":

In recent years he has earned so little that he did not pay federal income taxes, although he still paid thousands of dollars toward Medicare and Social Security. The earned-income tax credit is intended to offset those payroll taxes, to encourage people with lower-paying jobs to remain in the work force.

Supported by presidents of both parties, the EITC has been extremely successful in reducing poverty among working Americans. It's no wonder Ronald Reagan famously called it "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress."

While the EITC's price is well worth paying, it is a steep one. As the Washington Post documented in its ranking of the top 10 tax breaks, the Earned Income Tax Credit cost the U.S. Treasury $62.5 billion in 2011. As it turns out, many of the biggest tax credits for education, health care, retirement and more go to middle (or upper middle) class households.

At a time when income inequality is at its highest in 80 years, the federal tax burden at its lowest in 60 years and $1 trillion annual budget deficits, the often ignored cost of tax expenditures radically changes the discussion of America's national debt. As Lori Montgomery explained in the Washington Post last fall:

The number of tax breaks has nearly doubled since the last major tax overhaul 25 years ago, with lawmakers adding new benefits for children, college tuition, retirement savings and investment. At the same time, some long-standing breaks have exploded in value, such as the deduction for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.

All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Only about 8 percent of those benefits went to corporations. (The write-off for corporate jets equals about .03 percent of the total.) The bulk went to private households, primarily upper-middle-class families that Obama has vowed to protect from new taxes.

5. A Middle Class Safety Net

That America's safety net increasingly benefits the middle class and the elderly is a point seized on by commentators on the right (here and here) and left (here and here). As The Times noted:

The government safety net was created to keep Americans from abject poverty, but the poorest households no longer receive a majority of government benefits. A secondary mission has gradually become primary: maintaining the middle class from childhood through retirement. The share of benefits flowing to the least affluent households, the bottom fifth, has declined from 54 percent in 1979 to 36 percent in 2007, according to a Congressional Budget Office analysis published last year.

Conservatives denounce this as "middle class vote-buying" by Democrats. (If so, it doesn't appear to be working, as the increasingly Republican voter-recipients in Chisago County, Minnesota attest.) But for liberals, it is instead a reflection of the stagnation of American incomes and the shrinking middle class. The Heritage Foundation and its ilk want to shred the safety net and return to a mythical America that never was, one which provided "aid and renewal through the intimate relationships of family, community, and local institutions and local governments." For most Democrats, after 50 years of globalization, regressive tax policy, government-funded giveaways to the rich, evaporating employer health and pensions plans, surrender is not an option. In the 21st century, more (if better targeted and paid-for) investment in education, public infrastructure, health care and retirement security is the only way America will compete — and Americans will care for each other.

(This piece also appears at Perrspectives.)


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