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Entitlements: A Hammock for the Lazy or a Safety Net for All of Us?

HammockOver the past few months, America's social safety net -- also known as its "entitlement" programs -- has gotten a tough rap. Republican presidential candidates and congressmen have decried its cost, its supposed infantilization of the citizenry, and its long-term effect on the American dream.

Yes, this collection of programs and services has been described as "a dime bag" of drugs that will "hook" users, a threat to America's "merit-based society," and a socialist tool that will steal "America's soul." And the people who accept money from these programs? They are "passive," "lazy," "slothful," and are "systematically destroying" America's work ethic.

Viewed in these stark terms, entitlements seem terrifying -- but when you look at who is actually receiving them, the picture changes rapidly.

Let's examine the largest two slices of the entitlement pie first: According to a recent analysis by the nonprofit Center on Budget and Policy Priorities, 53% of entitlement spending goes to the elderly through Social Security and Medicare. And, as a study recently released by Wider Opportunities for Women suggested, these programs are hardly encouraging sloth: For many oldsters, they can mean the difference between economic viability and desperate poverty. Another 20% goes to the disabled, through programs like Supplemental Security Income and Medicaid.

Sure, But Aside from the Elderly and the Disabled ...

What about the remaining 27% of entitlement spending? Well, the CBPP found that 18% goes to working households, through entitlements like the school lunch program, the earned income tax credit, the child tax credit, and the children's health insurance program, which are designed to help provide a minimum standard of living for the working poor, a group that the Department of Labor conservatively estimates at 10 million.

After deducting the shares absorbed by the elderly, the disabled and the working poor, we're left with 9% of entitlement spending, about $176 billion a year. But even within that figure, the CBPP finds that only a small portion finances the slothful layabouts whom entitlement critics complain about. An estimated 7% goes to the "almost elderly," covering medical care, unemployment insurance, Social Security survivor benefits and Social Security benefits for those between the ages of 62 and 64.

And the remaining 2% of entitlement spending? That gets spent on what is generally temporary assistance for needy families, and other programs designed to help those who are sound of mind and body, but whose lives have been undermined by bad luck, job losses and the unsteady economy.

Divide and Conquer

Some critics have chosen to dive into the deep end of the entitlement fight, suggesting ways to cut Medicare and Social Security -- two of America's most popular government programs. But savvier critics of the social safety net have taken a divide-and-conquer approach, drawing a separation between spending on the elderly -- incidentally, one of the nation's most powerful voting blocs -- and other entitlements. One popular argument is that, because Social Security and Medicare are funded through specific, mandatory payroll taxes they should be thought of as distinct from other social programs.

If Social Security and Medicare benefits were channeled into -- and out of -- private savings accounts, this argument might hold some water, as it would suggest that the money that one pays in and the money that one gets out are the same. In reality, the amount of money that one gets out of these programs varies widely from what gets put in, depending on cost of living increases, mortality rates, and changes in coverage. For that matter, it's worth noting that other safety net programs -- like unemployment insurance -- are also partially funded through earmarked taxes.

We Have Met the Entitlement Slackers, and They Are Us

Here's another little-known fact: Far from funding some imagined underclass of nonworking slackers, entitlement spending is distributed fairly evenly across the economy. The CBPP estimates that 58% of entitlement spending goes to the middle 60% of households -- better known as the middle class. The richest 20% receive about 10% of these benefits, while the bottom 20% receive about 32%.

Another argument for slashing these programs, proposed earlier this year by Mitt Romney, is that entitlements aren't just funding a bloated underclass, but also a bloated federal bureaucracy. The math, though, doesn't back Mitt up. Administrative costs for federal entitlement programs eat up between 1% and 10% of their budgets; 90% to 99% goes to the intended recipients.

In the case of Medicare, administrative costs are estimated at between 3% and 4% of total spending, leaving 96% to 97% going toward medical care. By comparison, private insurers spend more than 17% of their revenues on administration and paying investors.

Whether by providing food to hungry children, economic security to the unemployed, or health care to the elderly, entitlements are a vital life preserver, helping keep the middle class afloat. As voters this year are asked to choose between strengthening the social safety net and making it smaller, it's worth taking a bit of time to recognize precisely who relies on these programs. Because the truth is, rather than providing a hammock for unmotivated slackers, entitlements are offering a safety net for most of the voting public.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.



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coinman507

Those temporary out of work or bad luck people of sound mind and body you talk about are on the dole for years or even generations. You try to make itsound as if everyone getting government hand outs deserve it.

November 28 2012 at 6:10 PM Report abuse rate up rate down Reply
ldomenech305

You pay money into Social Security and Medicare. The Federal Government holds that money FOR US to be used when we qualify. It is not free money for it to get their hands on it. That is why it infuriated me and many others when Obamacare took 79 billion from Medicare to fund that terrible law.

November 28 2012 at 12:09 PM Report abuse rate up rate down Reply
pwgilmartin

Mr. Watson,

If you pay for it as one does for Social Security and Medicare and Workers Comp., it is NOT and "Entitlement".

In fact it is money held in trust by the government.

It is not free money to those too lazy to work or stupid to make a profit in the market.

March 31 2012 at 9:59 PM Report abuse rate up rate down Reply
bggdg

Watson has become nothing short of a pitiful caricature as he shills for failed left-wing statism.

The absurdity of analyzing the efficacy of entitlements by considering benefits paid, but ignoring the associated costs is cartoonish to all but the most intellectually defenseless readers. Imagine for a moment that as your next door neighbor I come to you with the following demand:

During your working life, from every paycheck you receive I will be confiscating a portion of the fruits of your labor. In exchange, upon your retirement I promise to return a portion of the ill-begotten largesse I have previously stolen, absent any return on your stolen resources. For this, you will bow at my feet for saving you from a life of impoverished retirement.

And yet, Brucey and his band of useful idiots bleat their obedience to the very attackers who have forcibly instituted precisely such a ponzi scheme.

As the saying goes, you just can't fix stupid!

March 15 2012 at 10:41 AM Report abuse +2 rate up rate down Reply
1 reply to bggdg's comment
bggdg

Put more eloquently, from "The Wealth of Nations", Book II, Chapter III:

"It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will."

The knuckle-dragging goons hatred of citizens could not possibly be more severe, nor could the stupidity of the bleating supporters of these despicable attackers.

March 15 2012 at 7:23 PM Report abuse rate up rate down Reply
mt57

This is a superficial argument. Just because these programs are given to the kinds of people described in the article does not justify every dollar paid or every term of eligiblity. There is a lot of abuse of the disability program; there really are slackers in it. There is a lot of fraud in Medicare and Medicaid. A lot of the expense in the health care programs is avoidable if people live healthier lives and the question is why others should pay for their unhealthy conduct. Similarly 20% or more of the health care is spent on people in the last year of life so obviously not sucessful and we should be limiting that too.

March 15 2012 at 10:30 AM Report abuse rate up rate down Reply
Kellie

Bruce you amaze me with your BS. Are you counting the federal funds granted to states to prop up their un employment and welfare programs. And where did you get your information that all SSI receipants are elderly. How about getting some real facts instear of your skewed information.

March 15 2012 at 8:18 AM Report abuse +1 rate up rate down Reply
kramdenrf

Hammock for the lazy? Naw, that's the GOP, the party of "I don't need no education, I can be a gubernor of Wisxonsin.."

March 15 2012 at 1:09 AM Report abuse +1 rate up rate down Reply
gopispoison666

The article is accurate and you can see the droolers swarming around it with their mouths all aslobber.. You righties just hate and fear the truth with every ounce of rottenness inside your feeble brains, don't you?

March 15 2012 at 12:59 AM Report abuse rate up rate down Reply
ha6ai

OH NO! Not Bruce Watson again!

OK, what's the latest Obama-"progressive" HuffPuff AOL Demo propaganda hit piece?

What an interesting admixture of outright LIES (making up Republicans' alleged slurs on Social Security), and conflating "entitlements" with Welfare.

No Republican has cast ANY slurs on Social Security recipients (that's the job of lefties who want to deprive the "rich" of their hard-earned Social Security).

Medicare has been under attack from Obama and the Dems (he stole one-half TRILLION dollars to waste on "Obamacare", in cuts in payments to doctors). They want to deprive the "rich" (upper-middle class) of the Medicare they (over)paid for their whole working lives.

The "entitlements" of the "Earned Income Tax Credit" is actually Welfare under the guise of a tax "credit" (a gift given to many middle-class "unmarried" employees).

No "Republican" contender has criticized Medicaid or essential Welfare. But what are in fact essentially Welfare has programs have been sorely abused - by being expanded to give money to people who work or are fully capable of doing so, and have encouraged people not to look for work - and that is the primary area of disagreements.

By the way, even mainstream Demos do not question the need to deal with the growing size of entitlements (although Obama has ignored the recommendations of his own "commissions" he appointed to study necessary solutions).

Sooooo. Bruce Watson/Obama and AOL/HuffPuff: Why not publish your "progressive" leftist Obama propaganda somewhere OTHER THAN the "Finance" section. It is abusive. It is terribly dishonest. It is a bad joke.

March 15 2012 at 12:38 AM Report abuse rate up rate down Reply
ha6ai

OH NO! Not Bruce Watson!

OK, what's the latest Obama-"progressive" HuffPuff AOL Demo propaganda hit piece?

What an interesting admixture of outright LIES (making up Republicans' alleged slurs on Social Security), and conflating "entitlements" with Welfare.

No Republican has cast ANY slurs on Social Security recipients (that's the job of lefties who want to deprive the "rich" of their hard-earned Social Security).

Medicare has been under attack from Obama and the Dems (he stole one-half TRILLION dollars to waste on "Obamacare", in cuts in payments to doctors). They want to deprive the "rich" (upper-middle class) of the Medicare they (over)paid for their whole working lives.

The "entitlements" of the "Earned Income Tax Credit" is actually Welfare under the guise of a tax "credit" (a gift given to many middle-class "unmarried" employees).

No "Republican" contender has criticized Medicaid or essential Welfare. But what are in fact essentially Welfare has programs have been sorely abused - by being expanded to give money to people who work or are fully capable of doing so, and have encouraged people not to look for work - and that is the primary area of disagreements.

By the way, even mainstream Demos do not question the need to deal with the growing size of entitlements (although Obama has ignored the recommendations of his own "commissions" he appointed to study necessary solutions.

Sooooo. Bruce Watson/Obama and AOL/HuffPuff: Why not publish your "progressive" leftist Obama propaganda somewhere OTHER THAN the "Finance" section. It is abusive. It is terribly dishonest. It is a bad joke. OH NO! Not Bruce Watson!

OK, what's the latest Obama-"progressive" HuffPuff AOL Demo propaganda hit piece?

What an interesting admixture of outright LIES (making up Republicans' alleged slurs on Social Security), and conflating "entitlements" with Welfare.

No Republican has cast ANY slurs on Social Security recipients (that's the job of lefties who want to deprive the "rich" of their hard-earned Social Security).

Medicare has been under attack from Obama and the Dems (he stole one-half TRILLION dollars to waste on "Obamacare", in cuts in payments to doctors). They want to deprive the "rich" (upper-middle class) of the Medicare they (over)paid for their whole working lives.

The "entitlements" of the "Earned Income Tax Credit" is actually Welfare under the guise of a tax "credit" (a gift given to many middle-class "unmarried" employees).

No "Republican" contender has criticized Medicaid or essential Welfare. But what are in fact essentially Welfare has programs have been sorely abused - by being expanded to give money to people who work or are fully capable of doing so, and have encouraged people not to look for work - and that is the primary area of disagreements.

By the way, even mainstream Demos do not question the need to deal with the growing size of entitlements (although Obama has ignored

March 15 2012 at 12:26 AM Report abuse rate up rate down Reply