Wednesday, February 15, 2012

Government Support Programs No Longer for Just the Poor – Middle Class Opponents of Government Programs Now Getting Support

Funny How That Might or Might Not Change One’s Opinion

A report in the New York Times shows that one change that is taking place in America’s economy is that government programs meant to provide a safety net for the poor are becoming the safety net for the new poor.  The new poor in this case are the formerly middle class families that can no longer lead a middle class life.

The story focuses on people like Ki Gulbranson

Ki Gulbranson owns a logo apparel shop, deals in jewelry on the side and referees youth soccer games. He makes about $39,000 a year and wants you to know that he does not need any help from the federal government.

Now $39,000 a year is not great, but it should keep a family off of government welfare programs. 

Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.

Mr. Gulbranson lives in  prosperous Chicago county north of Minneapolis, the kind of area that should not have needy people.  But in today’s economy that is no longer true.

Dozens of benefits programs provided an average of $6,583 for each man, woman and child in the county in 2009, a 69 percent increase from 2000 after adjusting for inflation. In Chisago, and across the nation, the government now provides almost $1 in benefits for every $4 in other income.

Older people get most of the benefits, primarily through Social Security and Medicare, but aid for the rest of the population has increased about as quickly through programs for the disabled, the unemployed, veterans and children.

Of course many people will not think of Social Security and Medicare as government aid, they think they paid for and are paying for these programs.  But people currently collecting Social Security payments are taking far more out of the system than they ever put in, and as far as Medicare is concerned, beneficiaries pay only about $1.00 out of every $3.00 of benefits.

The result is that public spending on benefits is going more and more to middle income or formerly middle income families.

The government safety net was created to keep Americans from abject poverty, but the poorest households no longer receive a majority of government benefits. A secondary mission has gradually become primary: maintaining the middle class from childhood through retirement. The share of benefits flowing to the least affluent households, the bottom fifth, has declined from 54 percent in 1979 to 36 percent in 2007, according to a Congressional Budget Office analysis published last year.

And of course if anyone thinks that would change the attitude by recipients, that attitude being that they are opposed to government programs that help people who need help, well political philosophy trumps economics

Support for spending cuts runs strong in Chisago, where anger at the government helped fuel Mr. Cravaack’s upset victory in 2010 over James L. Oberstar, the Democrat who had represented northeast Minnesota for 36 years.

“Spending like this is simply unsustainable, and it’s time to cut up Washington, D.C.’s credit card,” Mr. Cravaack said in a February speech to the Hibbing Area Chamber of Commerce. “It may hurt now, but it will be absolutely deadly for the next generation — that’s our children and our grandchildren.”

But even stalwart tea party adherents are maybe softening their positions after their collision with reality.

When pressed to choose between paying more and taking less, many people interviewed here hemmed and hawed and said they could not decide. Some were reduced to tears. It is much easier to promise future restraint than to deny present needs.

“How do you tell someone that you deserve to have heart surgery and you can’t?” Mr. Gulbranson said.

Funny how things work out.

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