What ARE implications of the Republican vision of individualism that is at the core of the current Republican campaign for the White House.
Let’s look at government programs to help the poor.
Social Safety Net
The Republican claim is that the social safety net put in place after the Great Depression and expanded by Medicare passed during the Johnson administration and other programs since has exacerbated the problem of poverty in this country rather than reducing it. Florida Senator Marco Rubio summarized that view in a speech at the Reagan Library.
These programs actually weakened us as a people. You see, almost forever, it was institutions in society that assumed the role of taking care of one another. If someone was sick in your family, you took care of them. If a neighbor met misfortune, you took care of them. You saved for your retirement and your future because you had to. We took these things upon ourselves in our communities, our families, and our homes, and our churches and our synagogues. But all that changed when the government began to assume those responsibilities. All of a sudden, for an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government’s job.
This line of reasoning is based on two assumptions.
- Social Safety Net money is wasted because it doesn’t reduce poverty and creates a culture of dependency.
- The private sector can do a better job than the government in administering these programs, so handing this over the private sector will reduce the costs to taxpayers who can then use that savings to more efficiently help those in need. This will eliminate the culture of dependency.
Let’s look at each claim.
The first one is simple.
The poverty rate among the elderly was 25% before Social Security and Medicare. These programs alone have reduced elderly poverty to 14%. When you include all the other safety net programs, the elderly have the lowest poverty percentage of any age group in the country at 9%.
The Earned Income Tax Credit reduced the number of poor people by 6M, half of them children. Food Stamps come in a close second at 5M.
This table shows how all of the other programs have affected the poor.
|Effect of Specific Adjustments to Income on Poverty Counts, 2010, in Millions|
|SNAP (food stamps)||-5.2||-2.2||-2.5||-0.4|
|LIHEAP (energy assistance)||-0.3||-0.1||-0.2||0.0|
|Child support paid||0.3||0.1||0.4||0.0|
|Federal income tax before credits||1.2||0.2||1.0||0.1|
|Medical out-of-pocket expenses||10.1||2.1||5.4||2.9|
|Number of People in Poverty||49.1||13.6||29.2||6.2|
You can see that the table also lists those things that exacerbate the problems of the poor. Those include FICA deductions, childcare expenses, and that largest contributor to the ranks of the poor, uninsured medical expenses. The Affordable Care Act will provide a very high percentage of these people insurance coverage that they can’t afford today. The net effect is that 32M who don’t have insurance today will be insured and be able to afford care.
This graph also demonstrates the effects of commitment at the federal to reduce poverty.
The other side of the equation is easy too because it is just math.
The question is can the private sector really take up the slack and provide better services to care for those in need than what is available at the federal level? The graph demonstrated that before the social safety net was expanded and charitable institutions were bearing more of the load, the poverty level was at 23%.
There are currently 45M people in poverty.
There are currently an estimated 335,000 churches in this country. Roughly 59M people attend church regularly and the average size of a congregation is 75 people.
Here’s how the math works out.
If we depended on churches to deliver the same level of support that the government current provides, each church would be responsible either directly or indirectly for 137 people.
If you assume that the average household size in country applies to those who attend church regularly that means that there are 22M households where church going is a regular activity. Each household would be responsible to support two more people. How much would they have to pay?
The cost for our social safety net (excluding unemployment) in 2010 was $365B. As this graph shows, the majority of that increase as for Medicare.
Math again comes to our aide. The amount of money we are spending per poor person is a little over $8K. Using our previous figures, every church would need to come up with an additional $1M a year. On a per family basis, every family would need to come up with an additional $16K.
Where is that money going to come from?
The conservative claim is that tax rates would go down and the private sector would give more.
However, simple math can help us with this claim too since we have already determined that the average family would have to contribute an additional $16K a year to make up for the support currently coming from the government. The average individual tax (federal, state, and local) paid in 2010 was $10,549. The social safety net spending represents roughly .3% of the federal budget. So even if we extrapolate that savings to the total tax burden rather than just the federal tax, the reduction each individual would see is $31.64. With that savings comes the burden providing the equivalent of $16K in services to the two poor people they are responsible for.
Why the Math Doesn’t Work
The math doesn’t work because in a tax system, the government receives contributions from everyone.
In a private sector system, contributions only come from those who are motivated to contribute. There just aren’t enough willing to contribute to cover the gap. Today, the average charitable contributions are shown in the following graph. You can see they are all in the mid to low single digits. Adding another $31.64 in tax relief isn’t going to dramatically increase this contribution.
Conservative logic is faulty on this count too.
Their claim is based on a simplistic view of the situation.
Because they are looking at this through the prism of conservative values, conservatives have a difficult time understanding why anyone would take money from the government rather than taking the initiative to improve their lives themselves.
Rather than go into the details of why people are poor, or cycle in and out of poverty; let’s just address the question of dependence.
The key question here isn’t even whether dependency exists because the data also doesn’t necessarily support that bit of common wisdom either.
The only real question that conservatives are raising is whether dependency is a function of getting help from the government rather than the private sector because in both cases the poor are getting services they didn’t pay for. If anyone has had any personal experience with the challenges of getting money from the government, you know that it is infinitely more complicated to satisfy government requirements than it is to get help from a charitable organization.
So if there is a culture of dependency that exists among the poor, changing the source to one that is easier to deal with would logically INCREASE dependence.
Yet Paul Ryan and others claim that this is the problem. In a speech to the American Enterprise Institute he said our safety net, “lulls able-bodied people into lives of complacency and dependency, which drains them of their very will and incentive to make the most of their lives. It’s demeaning.”
And therein is the rub.
The bottom line when you deconstruct this whole argument is that conservative Republicans object to the very CONCEPT of providing assistance to the poor.
Mitt Romney summarized the current conservative Republican view when he said, “I said I’m not concerned about the very poor that have the safety net, but if it has holes in it, I will repair them…The – the challenge right now – we will hear from the Democrat Party, the plight of the poor, and – and there’s no question, it’s not good being poor and we have a safety net to help those that are very poor.”
But when you look at the Ryan Budget, which Romney also supports, it does not repair the safety net. In fact it includes steep cuts to food stamps, school lunches, crop subsidies, Supplemental Security Income for very poor seniors and disabled people, unemployment insurance, veterans’ pensions and refundable tax credits to the working poor. Even the US Conference of Catholic Bishops, though they are unhappy with the current administration over health care reform, wrote a series of letters objecting to the Ryan budget. They reiterated our national responsibility to protect the poor and said the proposed GOP budget “fails to meet these moral criteria.”
The bottom line is that government through the tax code is able to step in and spread the cost of programs for the poor over the whole taxpaying population.
The program generates positive results at a cost of approximately $30 per tax payer.
Without these programs the number of people in poverty would increase and the cost for those willing to provide services for those in need would increase dramatically from what they are paying today.
Those are the facts.
What we have from the Republicans is a thinly veiled attack on the poor. They feel that the poverty is the appropriate punishment for those unwilling to work for a living and any attempt to help those in need only encourages those who have already made bad decisions to continue their pattern. Since the poor clearly have earned their condition, Republicans feel perfectly justified in turning their back on them in the interests of debt reduction.
But that doesn’t make sense either, because when you take out Medicare, poverty programs represent only .3% of the federal budget.
So why bother?
It’s because Republicans are terrified of taking on the REAL problem of Medicare and jobs. Instead they are trying to convince voters that liberals have been running up the deficit by wasting money on poor people who don’t deserve it.
This “big lie” politics is a method of distraction that Republicans appear to be much better at that Democrats. In future posts we’ll try to figure out why.
Next let’s deconstruct the Ryan budget and determine how effective it is in reducing debt.