NCPA - National Center for Policy Analysis


February 14, 2007

Another round of our annual budget battles started when President Bush submitted his fiscal 2008 proposal last week.  Every year we hear complaints about accounting gimmicks and unrealistic assumptions.  There's a ferocious crossfire of charges and countercharges.  Hardly anything ever gets resolved.  Budgets almost always remain in deficit (41 out of 47 years since 1960), says columnist Robert Samuelson.

Much of the blame can be placed on 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.

Almost no one wants to slash these programs. They have huge constituencies; they're popular. Paradoxically, their invulnerability and size also protect much of the rest of the budget, says Samuelson.

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, says Samuelson.

Source: Robert J. Samuelson, "Welfare State Stasis," Washington Post, February 14, 2007.

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