Robert Samuelson has a very good diagnosis of our country as a welfare state.
Spend a moment studying the adjacent table. It illuminates why another of our annual budget battles — begun last week, when President Bush submitted his fiscal 2008 proposal — seems so fruitless and (yes) repetitious.
The table shows the rise of the American welfare state. In 1956, defense dominated the budget; the Cold War buildup was in full swing. The welfare state, which is what “payments to individuals” signifies, was modest. Now everything is reversed. Despite the war in Iraq, defense spending is only a fifth of the budget; so-called entitlement payments to individuals are almost 60 percent — and rising. In fiscal 2006, the federal government spent almost $2.7 trillion. Social Security ($544 billion), Medicare ($374 billion) and Medicaid ($181 billion) dominated. There was $199 billion more for payments to the poor, including the earned-income tax credit and food stamps.
The welfare state has made budgeting an exercise in futility. Both liberals and conservatives, in their own ways, peddle phony solutions. Cut waste, say conservatives. Well, network news reports of $20 million federal programs that don’t work may seem — and be — scandalous, but like Amtrak they’re usually mere blips in the total budget. For its 2008 budget, the Bush administration brags it would end or sharply reduce 141 programs. But most are microscopic; total savings would be $12 billion, or 0.4 percent of spending. Worse, Congress has previously rejected some of these cuts.
Liberals have their own cures. Cut defense, some say. Okay. In 2006, military spending (including the war in Iraq) totaled $520 billion, slightly less than Social Security. If it had been halved, the savings would have just covered the deficit ($248 billion). Little would be left for new programs. Raise taxes on the richest 1 percent, say some. Okay. The richest 1 percent pay about a quarter of all federal taxes. In 2006, that was about $600 billion. To cover the deficit would require about a 40 percent tax increase. Needless to say, neither proposal is politically plausible.
Annual budget debates are sterile — long on rhetoric, short on action — because each side blames the other for a situation that neither chooses to change. To cut spending significantly, conservatives would have to go after popular welfare programs, including Social Security and Medicare. To raise taxes significantly, liberals would have to go after the upper middle class, a constituency they covet (two-thirds of all federal taxes come from the richest fifth). Deficits persist, because neither side risks its popularity, and, indeed, both sides pursue popularity with new spending programs and tax breaks.
It might help if Americans called welfare programs — current benefits for select populations, paid for by current taxes — by their proper name, rather than by the soothing (and misleading) labels of “entitlements” and “social insurance.” That way, we might ask ourselves who deserves welfare and why.
If that isn’t depressing, I don’t know what is. The only solution is clear: cut the damn entitlements. However, our politicians derive their power from such programs, using them to create a stable base of voters who can be drawn back into line with a well timed benefit increase.
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