Who are the Deadbeats?

In his bid for the presidency, Mitt Romney said 47% of Americans consider themselves to be entitled to government benefits.  In a recent letter to voters, an Indiana Republican congressman reported that nearly 70% of the Federal budget was spent on entitlements.  Tea Party Republicans constantly push the idea that all of our budget problems are driven by entitlements.  Amazingly, all of these statements may be true, but only if we grossly expand the definition of “entitlements”.

Most voters agree entitlements include Social Security, Medicare, and Medicaid.  These social programs are funded through specific payroll taxes, most are operating on a surplus, and none contribute to the Federal deficit.  In fact, a portion of our federal debt is borrowed from these surplus accounts.  A majority of social programs go to the elderly, while about a third goes to the disabled and working poor.  All together, 91% of social programs go to people who are retired, cannot work, or are unable to earn enough to live.  This accounts for no more than 25% of the U.S. population – far from the 47% suggested by Romney, and the 50 + percent suggested by the Tea Party.

In order for conservative claims to ring true, we must expand the definition of entitlements as described by the Center on Budget and Policy Priorities:

“By "entitlements," CBPP is including Social Security, Medicare, Medicaid, children's health insurance, food stamps, school lunch programs, welfare, unemployment insurance, the Child Tax Credit and the Earned Income Tax Credit.”

When we add unemployment insurance, entitlement population increases by another 4% totaling about 30%.  Entitlement population really spikes when we add Tax Credits, which captures all working families at all levels, and earns most of us the title of "deadbeat".  Then conservative claims ring true, kicking up the entitlement population to over 50%, and increasing Federal budget “expenses” to about 68% by defining Tax Credits as “expenses” and adding trillions to the entitlement figure.

Who, exactly is "them"?

By using big numbers and re-defining entitlements, conservatives create the illusion of a deadbeat society that simply does not exist.  They hint that a large group of Americans choose not to work because liberals have made it too easy.  To quote Mitt Romney, "[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."  Who are those people?  Let’s look for answers by understanding our population (2012 data):

29.65% of Americans earn middle class wages or better.

17.25% are children under 16 yrs.

4.52% are full time parents.  Less than half of U.S. children have a full time parent.

4.34% are full time students of working age.  Some may work part time.

5.06% are unclassified.  Some have retired early. Others may have varying disabilities. Not on Federal entitlement rolls.

8% are working at or below the poverty line (under $10.00 per hr.).

3.62% are actively seeking work, but still unemployed.

10.66% are retired elderly.

4.80% are severely disabled.  Another 17.5% have varying degrees of disabilities.

4.18% are incarcerated, hospitalized, or institutionalized

As you can see, mostly everyone in America is working, studying, or retired.  Exceptions include full time parents, severely disabled, and institutionalized.  The only able-bodied people who choose not to work are stay at home parents, retired, and perhaps a few of the unemployed or marginally disabled.  The largest of all these is the healthy retired, an able bodied, non working sector that has grown dramatically over the last 100 years.  The second largest is stay at home parents, a sector that has shrunk over the last 50 years as more mothers have joined the work force.  So, who on this list are the deadbeats?

Let’s consider people who need their entitlements the least, such as middle and high earning families who get tax credits.  Eliminating these credits would reduce the number of deadbeat households by nearly half, reduce entitlement expenses by at least 15%, and bring the Federal budget into surplus!  Problem solved!  Of course, this idea would be wildly unpopular with voters, and it would take a bigger bite out of the middle class.  As the Tea Party warns us against entitlement addiction, it turns out we are among the addicts.  Amazingly, our entitlement addiction in the form of Tax Credits adds most directly to the deficit.  So, the most comfortable sectors in America will continue to take entitlements (as defined by conservatives) while we continue to seek an imaginary group of deadbeats to blame it on.

Tony F.

2013