Posted by: Debby Durkee | August 19, 2011

What would Reagan cut?

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What would Reagan cut?

This is a great column that speaks clearly about Social Security and Medicare as compared to Medicaid and a multitude of so-called “means-tested” giveaway programs at the federal level, bequeathed to us by LBJ and his “Great Society” in the mid-1960s. Welfare and other “public assistance” programs are nowhere mentioned as places to cut spending by the president or either political party. All that’s mentioned is Social Security and Medicare, which is strange since they at least have a running “revenue” stream. So, why aren’t we talking about the others that come directly out of the budget? Good question. This is from Robert W. Patterson of The American Spectator.

As Congress’s “super committee” begins its work of trimming $1.2 trillion in spending over the next decade, the pressure is on to overhaul Social Security and Medicare.

To be certain, these two programs place the fiscal health of the country at risk as Baby Boomers retire. Yet current and short-term federal deficits, driven by George W. Bush’s spending spree and Barack Obama​’s blowout budgets, have little to do with Social Security and Medicare.

Contrary to conventional wisdom, these pay-as-you-go programs have been budget-bracers, not budget-busters. In fiscal year 2009, when the federal deficit reached $1.4 trillion, these self-financing programs generated a $121 billion surplus, according to the Social Security and Medicare Board of Trustees. In 2010, the surplus was $32 billion.

These surpluses were no fluke. Since Ronald Reagan’s first term, revenue from payroll and self-employment taxes, income taxes on benefits, and Medicare premiums have generated a combined surplus in the four programs that the Board of Trustees oversee: Old-Age and Survivors Insurance, Disability Insurance, Hospital Insurance, and Supplemental Medical Insurance. By itself, Social Security has generated a 25 percent surplus since 1990.

Yes, the surpluses will ultimately dry up and become deficits, due to declining marriage and birth rates. But the Board of Trustees’ latest report does not project significant increases in Social Security and Medicare spending, relative to GDP, until the 2020s.

Consequently, if the “super committee” wants to cut the fat, it won’t find much in these social-insurance programs, which have paid for themselves for decades. That doesn’t mean Social Security and Medicare should run on autopilot; they do need tweaking. But it should prompt the committee to go after the biggest fat producer: the “means-tested” welfare programs of the Great Society. These 185 overlapping programs across six federal departments — as counted by Peter Ferrara of the Carleson Center for Public Policy — account for no less than half of current federal deficits.

Thanks to President Obama, means-tested welfare now commands nearly $700 billion in federal resources annually, according to the Heritage Foundation, which estimates that federal anti-poverty spending will total $7.8 trillion this decade. Moreover, unlike New Deal programs, these ever-proliferating Great Society initiatives lack a critical element: reciprocity. To this day, Social Security and Medicare retain this concept; beneficiaries receive no assistance unless they have paid into the system while benefits are determined in part by their contributions and number of dependents.

Accordingly, while Medicare was not adopted until 1965, it remains the only front of the War on Poverty that can be claimed a legitimate heir of the New Deal. Virtually all the remaining weapons of LBJ’s domestic war — including Medicaid and the State Children’s Health Insurance Program, Temporary Assistance for Needy Families, and the Low-Income Heat and Energy Assistance Program — are means-tested and none has a funding mechanism; they simply drain the public treasury. As their recipients have never paid into the system, these programs should never be considered “entitlements” but as discretionary and subject to downsizing.

That distinction should not be minimized; indeed, the contrast between social insurance of the New Deal and the social engineering of the Great Society — to which Ronald Reagan alluded in January 1982 — is more than just fiscal.  Snip –

…liberal welfare schemes — by displacing marriage and fathers from low-income families, a staggering loss for society and the economy — have left the underclass far less capable of self-reliance.

I think if there is talk of cutting these welfare programs, then there could very well be more flash mob action, London and Greece-like riots in the streets. Notice too that here of late Obama and other Democrats are talking about more food stamps! What do those things have to do with jobs? Uh…nothing. They have everything to do with buying the votes of those who cannot or will not work. Read it all here:

http://spectator.org/archives/2011/08/19/what-would-reagan-cut

Obama and the Congressional Democrats have thrown so much money at the welfare state in the years (2009-2010) when they had a lock on the entire government, that that spending increase is more than 2 ½ times any other welfare spending increase in the country’s history. Is this what Rahm Emmanuel meant by “never let a crisis go to waste”? According to the Heritage Foundation’s report dated September 2009, written and researched by Robert Rector and Katherine Bradley:

In his first two years in office, President Barack Obama will increase annual federal welfare spending by one-third from $522 billion to $697 billion. The combined two-year increase will equal almost $263 billion ($88.2 bil­lion in FY 2009 plus $174.6 billion in FY 2010). After adjusting for inflation, this increase is two and a half times greater than any previous increase in federal welfare spending in U.S. history. As a share of the economy, annual fed­eral welfare spending will rise by roughly 1.2 percent of GDP.

Under President Obama, government will spend more on welfare in a single year than President George W. Bush spent on the war in Iraq during his entire presidency. Snip —

While campaigning for the presidency, Obama lamented that “the war in Iraq is costing each household about $100 per month.” Applying the same standard to means-tested welfare spending reveals that welfare will cost each household $560 per month in 2009 and $638 per month in 2010.

Most of Obama’s increases in welfare spending are permanent expansions of the welfare state, not temporary increases in response to the current recession. According to the long-term spending plans set forth in Obama’s FY 2010 budget, combined federal and state spending will not drop significantly after the recession ends. In fact, by 2014, welfare spending is likely to equal $1 trillion per year.

According to President Obama’s budget projections, federal and state welfare spending will total $10.3 trillion over the next 10 years (FY 2009 to FY 2018). This spending will equal $250,000 for each person currently living in poverty in the U.S., or $1 million for a poor family of four.  Snip –

In the years ahead, average annual welfare spending will be roughly twice the spending levels under President Bill Clinton after adjusting for inflation. Total means-tested spending is likely to average roughly 6 percent of GDP for the next decade.

We simply cannot afford Obama’s welfare state. He wants everyone unemployed so they can be beggars to the government for their porridge. This is the “fundamental transformation” of the United States this president spoke of five days before he won the election. This is him “spreading the wealth around” in order to buy dependent votes. This is our president whose thinking is alien to the thinking of independent, free Americans. You can read the entire article here: http://www.heritage.org/Research/Reports/2009/09/Obama-to-Spend-103-Trillion-on-Welfare-Uncovering-the-Full-Cost-of-Means-Tested-Welfare-or-Aid-to-the-Poor

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Responses

  1. Fifty years of building a dependent class has gotten us where we are and all Obama is giving us is more of the same in larger quantities. Working to achieve fiscal soundness by eliminate long term dependency and removing ever expanding government regulations should be a key focus in the 2012 elections.


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