A Thorough Examination of the “Culture of Dependency”

Big topic today readers.  Big topic.  So I’m just going to get right down to it—in this blog we’re going to examine the conservative idea that we’re going broke because we have a culture of dependency, where more and more Americans are surviving on government handouts, undermining core values such as hard work, personal responsibility, and independence.

Now conservatives, please hear me out.  I promise I won’t be a dick.  I also promise that I’ll cite my sources, that where I’m guessing or equivocating I’ll say so specifically, and that I won’t use a tone that makes me sound like some high and mighty, intellectual, wonky liberal.  Most of all, I promise to TELL THE TRUTH.  If I get something wrong, it’s a mistake, not an attempt to mislead.  I promise.

OK, so again, our objective today is to examine the idea that we’re becoming a nation of “takers”, and that one of the biggest problems we face as a nation is poor and/or lazy people taking advantage of government handouts while the rest of us work for a living.  Ultimately, the problem, conservatives argue, is that we have so many entitlements in this society that the social safety net has become a “hammock”; people can just get food stamps, welfare, and Medicaid instead of working, and when they’re old enough, they can get Social Security and Medicare too.  Now if, after our examination, this is actually true, I’ll be furious as well, because anyone with the slightest sense of fiscal responsibility knows we can’t afford to pay for people not to work: after all, that’s not how capitalism works.

Social Security and Medicare

So let’s look at our system entitlements in detail, starting with the biggest two: Social Security and Medicare.  According to the Center on Budget and Policy Priorities, together, these programs make up 39% of the federal budget; Social Security at 24% ($814 billion), and Medicare at 15% ($498 billion). (1)

Now we can argue about whether we like these programs or not, but what cannot be argued is that the nature of these programs is to act, basically, as retirement insurance.  We pay payroll taxes all our working lives with the idea that in retirement, we won’t have to worry about health care (Medicare), and we’ll have a modest monthly stipend to help us pay our bills (Social Security).  In other words, these are not programs that are designed to benefit people who are lazy and don’t work; rather, they’re designed to provide a secure retirement for people who do work.  And we should also remember that the payroll tax is a flat tax—it doesn’t take into account how much you make—and, currently, it only applies to the first $113,700 of income, which actually makes it a regressive tax, in that the more money you make beyond that cutoff, the lower percentage you pay.

Again, I understand that Medicare and Social Security may not be a true conservative’s favorite programs, but these programs create no more a culture of dependency than having a company health insurance policy or 401K, for their intentions and functions are essentially the same.  The only difference is that I’m guaran-damn-teed (unless Congress changes the law) to get Social Security and Medicare (and no, they aren’t running out of money), which we all ought to be thrilled about, given Wall Street’s recent shenanigans.  The point is: if I’m going to pay nearly 8% of my salary to the government my whole life (6.2% for SSI and 1.45% for Medicare), it’s nice to know it’s going to come back to me, especially when I may not be able or willing to work anymore.

So Social Security and Medicare aren’t programs for moochers—they’re programs, primarily, for workers.  That 39% of the federal budget is not making our country poor, nor is it encouraging people not to work.  Can we agree on that?  (If not, please explain—using cited facts and well reasoned arguments.)

Medicaid and Food Stamps

OK, let’s tackle the next two biggest entitlements: Medicaid and Food Stamps.  Medicaid, in 2014, will cost the federal government about $318 billion; I made sure to get the 2014 number so that it included the costs of the ACA (Obamacare).  This comprises about 9.5% of the federal budget.  In 2013, the federal government spent about $82.5 billion on Food Stamps (SNAP)—I tried to find the 2014 number, but that’s still in flux; bear in mind that this program received an $8.6 billion cut over the next decade in the last Farm Bill.  Anyway, using the 2013 number, Food Stamps make up about 2.4% of the federal budget.

Together these programs make up 12% of federal spending.  Now, I’ll admit right of the bat that SOME portion of these programs do benefit people who aren’t working.  The question is how much?  Conservatives, unless I’m mistaken, believe that most of the people using these programs are moochers—that is to say, they’re working very little or not at all, and the reason they’re able to do so is that they have free food and medical care.

But again, the question is how many of these people are truly moochers, and how many are either unable to work (children, elderly, or disabled), or work, but don’t make enough money to pay all of their bills?

Let’s start with Medicaid.  First off, let’s forget about the Medicaid expansion under the ACA (Obamacare), because it applies only to people that are working; specifically, those who make between 100% and 138% of the poverty line.  We’re left, then, with who else is enrolled in Medicaid.  In 2012, 47% were children, 9% were elderly, 16% were blind and/or disabled, and 28% were adults.  The question now, unless we want to force children, a few elderly, and blind and disabled people to work, is how many of those 28% of adults are working, and how many are mooching?  To be perfectly honest, I couldn’t find a specific number on the non-working poor; however, by cobbling together a few numbers, I think we can get pretty close.

To begin with, the total number of Americans in poverty is around 15%, or 46 million people: this includes 13 million children and 6 million people age 65 or older.  This means that about 27 million American adults live in poverty.  Of these, 8.9 million work full-time jobs.  Rounding up, that leaves 18 million that are either working part time jobs, or not working at all—the moochers, in other words (although I’m not accounting for disabled, working-age adults).  So how much does Medicaid for these people cost us?  About $32 billion, because only 15% of Medicaid’s expenditures are paid out for adult care, and of those adults, 33% work full time.  Now that’s a lot of money to be sure, but to put it in perspective, that’s slightly less than one percent of the federal budget.

Paying for Food Stamps, a smaller program in the first place, becomes likewise much less upsetting when we look at who actually receives them.  Again, a large percentage of people receiving Food Stamps are children (47%),  8% are elderly, and another 10% are disabled, which means that 35% are adults.  If we use the same numbers of full-time working poor and part time/non-working poor, this means that we spend about $19 billion on food stamps for “moochers,” or around 0.6% of the federal budget.  Oh, and by the way, the estimated rate of Food Stamp fraud is less than one percent.

Other Welfare Programs

Now for the rest of it.  Here are all the other federal welfare programs, listed with their cost: Temporary Assistance for Needy Families ($7 billion), School Lunch Program ($10 billion), Children’s Health Insurance Program ($8 billion), Rental Assistance ($34 billion), Nutrition for Women, Infants, and Children—WIC ($6 billion), and Low Income Energy Assistance ($5 billion).  Together that’s $70 billion.  You’ll note that I didn’t include umemployment insurance, and that’s for two reasons: 1) when we’re working we pay taxes for unemployment insurance, so it ONLY benefits workers, and 2) the only way you qualify for unemployment is if you lost a job through no fault of your own AND are genuinely looking, but unable to find work.  Unemployment insurance is not a program for moochers.

For the sake of simplicity, as well as rational logic, let’s assume that the rate of usage for the rest of these programs is similar, by demographics, to that of Medicaid and Food Stamps: about 65% are for children, the elderly, and disabled, with the other 35% going to adults, and of those adults, 2/3rds are part-time/non-working poor.  Using this metric, about $16.5 billion goes to the “moochers.”

The Finding

Adding everything up, this means that we spend a total of $67.5 billion on “moochers”, here defined as part-time/non-working poor adults, or almost exactly two percent of the annual federal budget.  Now, in reality, the true number may be a little higher or lower than two percent, but this is a pretty damn good estimate based on extensive research (if you can do better, please send me your number and how you got it).

Anyway, maybe as a conservative, spending two percent of our budget on part-time/non working adults still upsets you, but even so, there’s NO WAY WE’RE GOING BROKE because of it.  No way.  And let’s not forget that a considerable number of part-time/non-working adults are people going to college to try to better themselves, or that a third of people who are homeless (and usually jobless) are people that mentally ill.

Yes, I’m giving poor people who work full-time the benefit of the doubt, as well as children, the disabled, and the elderly.  But that’s just common sense.  Anyone who works full time just isn’t a moocher, and we’re better off as a society if poor children can focus on getting an education rather putting food on the table, and where the disabled and elderly poor don’t have to choose between working or begging until the day they die.

Are there some “disabled” people out there that could probably work?  Sure, but to suggest that a majority, or even a quarter, of the people on disability are conmen is ridiculous—much of the disabled population is over 80.  Yes, in the end, I’m sure some people are gaming the system, taking advantage of our hard work in order to mooch their way through life, and that sucks.  But that’s clearly the exception—not the rule.  If it was the rule, we’d be spending a hell of a lot more than two percent supporting people who didn’t work.

Ultimately, I think most conservatives believe in a social safety net, especially for children, the disabled, and the elderly—I don’t know how any conservative that calls themselves a Christian could believe otherwise.  And if that’s the case, we need to focus more on why so many Americans have fallen into the safety net, rather than the paltry two percent of our budget we spend on the moochers.  So why do an increasing number of working Americans and families have to rely on Food Stamps, Medicaid, and other welfare programs to survive?

The primary reason is low wages (remember, we’ve accounted for the people that aren’t working full time).  For the fundamental truth is that if a person works a full-time job and still cannot to afford to pay for housing, medical care, and food for her family, then we, as a society, have two choices: 1) continue to supplement her salary through Food Stamps, Medicaid, and other programs, or 2) force employers to pay higher wages so that she can do so for herself.  Technically, there’s a third choice, the current conservative position, which is to make drastic cuts in the social safety net without making any efforts to raise people’s wages.  However, please understand what this would mean: not only will you get less from Social Security and Medicare when you retire (even though you’ll be taxed just as much to pay for them), but the people who serve us at fast food restaurants or stock the shelves at places like Walmart—our working poor—would gradually slide into third world living conditions, increased crime and disease along with them.  Is that the sort of society we want to live in because of a few moochers taking advantage of a tiny portion of the safety net?  Seems like a bad trade.

Instead of going to extremes, what about a hybrid?  A law that would compel every company with more than a certain number of employees to provide some sort of defined path to a full-time job with a living wage and health benefits over a reasonable time period—say, two to four years—so that hard working people that showed loyalty to their employer wouldn’t have to rely on government programs to survive.  Sure, they might qualify for such programs initially, but once they fulfilled their end of the bargain, they’d be off the government doll, and the company should be happy to have a proven, trained, loyal employee.  In this way, we wouldn’t have to raise the minimum wage, but overall, wages would rise, lifting more people out of dependency.  And to ensure that companies didn’t just hire and fire people to avoid compliance, the government could issue penalties in the form of tax hikes or fines to those that didn’t play by the rules.  And it could do the same for workers by disqualifying those who can’t hold down a steady job (if it’s indeed the workers’ own fault) from receiving safety net benefits.

However we get there, the point overall is that the conservative argument about dependency, welfare, etc., is just way overblown.  Two percent—that’s what conservatives are being told to be so furious about that we dramatically cut the social safety net; a safety net that, by and large, serves people who’ve either paid into it their whole working lives, or are children, elderly, disabled, or the full-time working poor.

So look, if you like being angry, be angry.  But don’t be angry about the people that are mooching off a tiny portion of the safety net.  It doesn’t cost us hardly anything.  Besides, think about your heart.

(1) Please bear in mind through this process that depending on who’s doing the calculations, the numbers and percentages attached government programs can vary slightly, but as a person who’s pretty familiar with the size, scope, and breakdown of the federal budget, I assure you, dear reader, the numbers I use throughout this paper are reliable and accurate as possible.

About The Author: Jay Scott

Comments

  • Reply Anonymous

    I found this to be informative…the% of the budget these programs use is small and to cut them would affect all our lives,not just the poor. Thanks for bringing that to light. The other programs like social security and Medicaid are paid for by people who expect to get what they have paid for. They are thereby entitled to receive what they paid for. Thanks for researching the percentages of people and their demographics as well. I have been disappointed in the corporations who use welfare to supplement their wages. They can be very blatant in providing for their employees info for government welfare upon hiring with the knowledge their employee will qualify. It really is not right since the tax payer ends up supplementing the corporations wages while the corporation make record profits. Dishonest.

  • Reply Janet Errett

    The comment above is mine.

  • Reply Alan Caldwell

    Jeff, this is an informative, useful blog posting. Thanks for the hard work and diligent research. I can’t say I am terribly in favor of more laws and rules for businesses, I think solutions need to be simple and easily understood — that’s the beauty of just raising the minimum wage, while people may not agree with that approach, the system/process/laws are in place to easily implement that change.
    Regarding unemployment insurance, as the co-owner of a small business, I can tell you that more than a few people abuse that benefit — we have some employees who choose to not take work assignments, and “just get unemployment instead”. They shouldn’t be allowed to do this per the rules, but the reality is that the unemployment office is very biased towards employees and the benefit is almost always approved. It is not a big amount of money (in terms of the federal budget) but as a business owner it is frustrating to see employees who do mooch. And by the way, our wages start at $9.50/hour — and we do not make any profit, but we stay in business.
    Again, thanks for the good education about the big issue. Alan

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