My CBPP colleagues just released an excellent piece of analysis on who benefits from entitlement programs. The findings blow a huge hole in the conservative meme that the nation is becoming an “entitlement society,” in which some undefined–but presumably large—share of healthy, young Americans live on the government dole rather than hard work.
Gov Romney, for example, recently warned of:
“…the dangers that the nation faces from the encroachment of the ‘Entitlement Society,’ predicting that in a few years, ‘we will have created a society that contains a sizable contingent of long-term jobless, dependent on government benefits for survival.’ ‘Government dependency,’ he wrote, ‘can only foster passivity and sloth.’ Similarly, former Senator Rick Santorum said that recent expansions in the ‘reach of government’ and the spending behind them are ‘systematically destroying the work ethic.’”
Newt Gingrich taps the same meme with his efforts to label President Obama “the food stamp president.”
Well, the problem is that the rhetoric fails to match the facts—by a long shot. Over 90% of the benefits of entitlement spending goes to people who are either elderly, disabled, or in working households. That’s right, folks: according to the data, this encroaching menace—entitlement spending that goes to lazy, healthy, adults—accounts for 9% of total entitlement spending.*
As the figure shows, 53% of benefits went to elderly persons (65+), 20% to disabled, non-elderly, 18% to non-elderly, not disabled working persons (working at least 1,000 hours over the course of a year), leaving 9% who plausibly fit the mould of the meme (non-elderly, non-disabled, non-workers—meaning working-age people who worked less than 1,000 hours).
Shine the light of facts on it, and the image of a nation of healthy, working-age people flush with government cash quickly fades to smoke.
The paper makes another interesting point about all this. If you’re looking to get upset about spending going to undeserving types, you’d be better off looking at tax expenditures as opposed to entitlement spending. The figure below shows that distribution of the $1.1 trillion in tax expenditures, like the mortgage interest deduction, employer-paid health benefits, and favorable tax treatment for capital gains and stock dividends. Two-thirds of those benefits go to the wealthiest top fifth of households and 24% to the top 1%.
Based on his tax returns, Gov Romney himself resides in that top 1%, where he is a primary beneficiary of the largesse of this part of the tax code.
In other words, to the extent that he and others want to go after “the entitlements,” I’d urge them to go after the ones we dole out through the tax code.
But don’t hold your breath.
*“Entitlements” in this analysis include Social Security, Medicare, Medicaid and CHIP, unemployment insurance, SNAP, SSI, TANF, the school lunch program, the EITC, and the refundable component of the Child Tax Credit. Entitlement, or mandatory, programs are distinct in the budget in that by law they are funded not by annual appropriations, but by permanent authorization. Thus, this part of the budget must expand and contract on the basis of eligibility and need, not annual appropriations.