Monday 11 March 2013

Government benefits

Black people, who make up 22% of the poor, receive 14% of government benefits. White people, who make up 42% of the poor, receive 69% of government benefits.
74 Comments

Who Benefits From the Safety Net

By BINYAMIN APPELBAUM and ROBERT GEBELOFF
A new analysis from the Center on Budget and Policy Priorities underscores that the poor are no longer the primary beneficiaries of the government safety net.
Terms like entitlements, government benefits and safety net often conjure images of tax dollars sliding from the hands of the wealthy into the pockets of the poor. But as we reported Sunday, that image is badly outdated. Benefits now flow primarily to the middle class.
The center’s study found that the poorest American households, the bottom fifth, received just 32 cents of every dollar of government benefits distributed in 2010.
Share of population and entitlements by income group, 2010. Source: Center on Budget and Policy Priorities analysis of data from Office of Management and Budget, United States Departments of Agriculture, Health and Human Services, and Labor, and Census Bureau. Spreadsheet (.xls)
The finding is broadly consistent with the data we reported Sunday that the poorest households received 36 percent of benefits in 2007, down from 54 percent in 1979, numbers that came from a study published last year by the Congressional Budget Office.

While the findings are not directly comparable because of differences in methodology, the new study suggests that the recent recession did not cause any significant increase in the share of benefits flowing to the poor, as might once have been expected.
The study found that older people received slightly more than half of government benefits, while the nonelderly with disabilities received an additional 20 percent. Most of these benefits are not means-tested – indeed, better-paid workers get more in Social Security.
Furthermore, the study notes that politicians have shifted benefits away from the “jobless poor,” through reductions in traditional welfare, and increased benefits for working families, for example through tax credits. The government also has steadily expanded eligibility for benefit programs.
“The safety net became much more work-based,” wrote Arloc Sherman and his collaborators at the center, a left-leaning research group. “In addition, the U.S. population is aging, which raises the share of benefits going to seniors and people with disabilities.”
Another finding of the study is that the distribution of benefits no longer aligns with the demography of poverty. African-Americans, who make up 22 percent of the poor, receive 14 percent of government benefits, close to their 12 percent population share.
White non-Hispanics, who make up 42 percent of the poor, receive 69 percent of government benefits – again, much closer to their 64 percent population share.
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74 Comments

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    • Bob
    • East Jesus,Iowa
    I stand corrected .Social Security max's out withholding at $100,100 at the rate of 10.4% combined employer/employee.

    Medicare does not max out and 1.45% is with held to an unlimited amount.

    I believe we should convert Social Security to an annuity plan with the interest rate of short term Treasury bills.

    Only contributors would be eligible for benefits and not immigrants that claim to be impoverished .This is sadly where much of our money goes.Many of these recipients hide their assets and steal our benefits.

    The annuity should pay out on a schedule that will assure that most contributors would recover most of their contributions. Possibly a 25 year payout. Any residual amount would be kept as a reserve for those who survive longer than 25 years from age 67.
      • Steve Hunter
      • Seattle
      The biggest beneficiary, Wall Street.
        • Bob
        • East Jesus,Iowa
        Entitlements! So, the middle class get most of the benefits from the entitlements. Who pays most for the entitlements? The MIDDLE CLASS DOES. Go figure.

        Also,putting Social Security and Medicare into the same bucket as all the handout programs is really dumb.We taxpayers pay for SS and Medicare and the Government repays us these contributions when we retire. Yes, the way the governent pays out more than a taxpayer contributes to the poorer recipients is an entitlement but that is payed by the wealthy taxpayers through their ceiling-less contributions. Social Security needs to fix this and make itself an annuity plan that pays out with interest what each of us pays in and nothing more.
          • Charley horse
          • Great Plains
          Their contributions are not "ceiling-less" There is a cap beyond which one does not have to pay SS taxes
          • Jon O'Bryan
          • Irvine, CA
          Good point: Why did NYT feel it needful to include SS, unemployment comp, Medicare, and Medicaid which comprise ~89% of this analysis yet are expressly not purposed for poorer populations only? The analysis is much more what you'd expect to see with those factors taken out.
        • Linda
        • Phoenix
        Raise the minimum wage- make employers pay enough for people to live instead of making record profits! CEOs who take home multi millions in bonuses and salaries are not earning it - and that is why they don't pay workers enough. When it gets to the point that working Americans cannot afford to buy the products they created, then we have trouble with a capital T!
        Most new jobs in Texas and here in Arizona are minimum wage keeping people poor and in need of help. Stop letting companies pay nothing.
          • pnut7711
          • dirty south
          Basically the taxpayers are picking up the tab for businesses that won't pay a living wage. They just suck up more profit, refuse to hire workers with benefits, instead hiring "contractors", temps, part-timers, etc. all so that the Executives and Stock Holders stick more money in their pockets. Meanwhile Republicans do everything they can to weaken labor laws, Unions, anything to keep the money flowing to the rich from the soon to be formerly middle class. It's incredible how they've brainwashed so many to vote themselves and their neighbors into poverty.
            • juanita
            • meriden,ct
            Business won't pay a living wage, because they don't have to- and you can't make them- nyahh, nyahh nyahh! Remember reading about the age of the "robber barons"
            in your high school history book? Workers were exploited and business owners lived like kings. That was why unions were started in the first place. The unions gave us a 40 hour work week, overtime, safer conditions in factories, and an end to child labor. Why have we forgotton this? Reagan and the right-wing Republicans have been gutting unions for 40 years, and this is the result. Welcome to the new age of robber barons.
          • Caf Dowlah
          • New York
          Who gets what, and how, is always a central question in any economy. Of course, there are many countries around the world where safety nets are much more stronger than it is in the United States. Most of the advanced industrialized countries provide universal healthcare to their citizens--the U.S. is not (not yet), one of those. A sound safety net is needed for proper functioning of an economic system--perhaps even the strongest critics of social safety net will agree that it made a big difference since the Great Depression in the United States. This study shows that now the poor are receiving only 32 cents of a welfare dollar, while much more is going to the so-called middle class. They receive welfare checks, still they are middle class? The study also shows that almost half of welfare dollars are going to older population. I guess my question is: Shouldn't welfare expenses be driven to the poor and to the children more than to the middle class and older population?
            • Gene S
            • Hollis, NH
            Much stupidity has been exhibited in the debate over Social Security and Medicare. In fact, both programs benefit the society as a whole.

            What Social Security has done during the great recession of 2007-12 is maintain a minimum level of spending on the part of the elderly, which has meant that our economy has not collapsed the way it did during the great depression of the 1930's. Yes unemployment has risen to 10%, but now it is under 8.5%. During the 1930's, with the same Wall Street bubble burst, 25% of all workers and 37% of all nonfarm workers were unemployed.

            In other words, Social Security is a safety net for the U.S. economy. I collect Social Security retirement benefits. I have added up all my contributions -- and those of my employers -- and I figure my return on the money at a little over 4%. You may consider it an entitlement, but it is a program to maintain consumer spending at a time of economic chaos.

            Medicare works in a similar way for the healthcare industry. While the Medicare reimbursement rates for hospitals and physicians seem low, they are considerably greater than what would be received were there no Medicare -- unless hospitals and physicians were to deny care to those who can't pay. In other words, stingy as Medicare is, it funds a large part of the healthcare industry in this country.

            The Democrats are failing the country by not emphasizing to the public the benefits to the economy and to the healthcare system afforded by these programs.
              • Chris
              • Boston, MA
              Advocates of smaller government believe government is inefficient, not worthless. Take, for example, Mitt Romney: he wants to stabilize social security by reducing benefits for citizens with high lifetime earnings. Why tax the middle class and rich only to return their own money to them later in life?

              Here's why not: for every dollar businesses pay in taxes, they spend 30 cents on compliance and efforst to legally evade tax codes. Money is then wasted in administration of these programs, which are susceptible to fraud and loopholes that create perverse incentives.

              Government can provide things that we cannot--like a safety net. However, this article shows that since '79, we have strayed from that goal. Fewer tax dollars make it to the needy and entitlement programs now constitute a larger fraction of our economy. Worse, the tax code has become less progressive.

              Increasing aggregate demand could theoretically stimulate a bad economy, but our current situation has been evidence to the contrary (http://www.washingtonpost.com/rf/image_606w/WashingtonPost/Content/Blogs.... Democrats and republicans agree that cutting the payroll taxes, which fund social security, would improve unemployment.

              Someday government will be smart enough enough to eliminate tax loopholes, avoid political standoffs and shutdowns, forecast the economy, and protect us from all sources of harm and misfortune, but not now.
            • Ben Pfeiffer
            • Seattle
            I would classify Social Security and Medicare as social insurance payments, not safety net payments. Social Security provides benefits that replace a larger share of covered average indexed monthly earnings for low earners, but that doesn't make the program a safety net. Most of what you characterize as safety net benefits are in fact social insurance benefits.
              • Sam
              • Florida
              I take issue with what is considered a benefit. SS and Medicare are paid for by the worker so not really an entitlement but a pension benefit.

              What about things like Pell grants, university education at state schools, mortgage interest deduction, are those government benefits? I'd say yes if you are counting SS as a benefit.

              What about the fact that Mitt Romney pays taxes at a much lower rate than I do? Is that a government benefit? I'd say yes, clearly the IRS treats Mitt's earned income as special since its taxed at a much lower rate? What about corporate tax rebates such that GE pays nothing in taxes from year to year, I'd call that a government benefit too.
                • Anonymous
                • USA
                My father paid approximately $70,000 into Medicare during his long tenure at Westinghouse.

                So far, with his two cancer surgeries and month-long stay at the hospital to recover, he's gotten back around $2 million in health care. That's a whopping 28 times what he paid in.

                Who made up the difference between what Dad paid in and what he's gotten so far? You and me, the taxpayer.

                Call it an 'entitlement'....call it a 'pension benefit'...call it whatever you want. The reality is that folks like my dad, who get back from Medicare much, much more than they ever paid in, are what's driving the deficit to the stratosphere.
                • prw
                • PA
                SS is not a pension. Your SS taxes are being used to pay for those currently receiving SS benefits. The purpose of SS is to help ensure that the retired and the disabled don't fall into poverty if their own savings are insufficient or are lost.
                • Concerned Citizen
                • Anywheresville, USA
                @Matt: this is a tiresome bit of illogic I read regularly. OF COURSE elderly people now on Social Security did not pay into it as much as they take out -- how could they? Salaries and the cost of living were infinitely lower when they were in their prime working years! But we impute INTEREST and TIME when talking about savings -- had they put this smaller amount of money into a bank, and earned interest on it, over 50 years, they would likely have about the amount they are now taking out.

                Looking ONLY at their contributions alone, and NOT at the interest that would have accumulated over half a century is grossly unfair.

                There is no way to put enough money aside (without interest) when there is constant inflation and higher costs -- it would require "savings" or contributing twice your actual income. Only INTEREST over time can equalize payments vs. inflation.

                What will happen in the future if we have significant DEflation is not clear.
              • Brian
              • NY
              I am amused and also horrified by the constant references to the "50%" of Americans who don't pay taxes.

              Of course, that is narrowly conceived as meaning only income taxes.

              Others have rightly mentioned those who make too little to have a taxable income, but who pay into Social Security and Medicare.

              Another large group, I believe about half of those not paying taxes, are those who are retired, living off Social Security and savings, and who paid taxes their entire working life (usually about 50 years.)

              Then, of course, there are those other lazy bums, orphan children.

              There is another group: People who really should be called out for their lack of contribution to the general good of the country, and who do not pay taxes; The members of the 1% who get all their income in forms, or countries, which allow them to not pay their due. I know one whose best "taxable income" over the last decade was $-650,000.00. A lot of this was done in real estate. Don't cry for him, He could lay hands on the odd million or two for the right (and I do mean Right) candidate easier than some in the other categories could come up with money for a square meal.
                • Concerned Citizen
                • Anywheresville, USA
                While orphaned children are not "bums" obviously, in fact many get SSI benefits despite being from wealthy families.

                The first time I ever heard of this was in college, when a friend admitted that since her father's death a few years earlier (he was elderly and had her late in life), she was getting a significant amount of money -- hundreds of dollars -- in "orphan's benefits". And this despite the fact her father left a substantial estate, and that she and her mother were quite wealthy and lived in the best neighborhood. She used the extra cash to buy clothes and makeup and pay for vacations, eating out, etc.

                I do not believe that is the intention of "orphan's benefits" and they SHOULD BE means tested.
                • JDKJJK
                • NY NY
                SSD benefits are not guaranteed for life. An individual collecting SSD can have their case reviewed at anytime and if it is determined that they are no longer eligible for disability benefits their disability benefits are terminated. Ironically, since the republicans are intent on shrinking the federal workforce this limits the possibility that a recipients disability benefits will be terminated.
                • Cam
                • Midwest
                Just so we are clear: there's no orphan's benefits provided by the gov't for adult children. For minor children, they can receive social security of their deceased parent - but this ends at 18.
              • Mitch S
              • Chicago, IL
              As Paul mentioned, I think there's a rhetorical slight-of-hand when we lump in social insurance programs with targeted assistance to those near or below the poverty line. Surely the figures must reflect a decent segment of middle-class families who are providing for sick/disabled family members and are only able preserve their middle-class-ness through Medicaid?
                • 5barris
                • NY
                The case has been made elsewhere that all government expenses are insurance expenses to insure that the economy continues to function, e.g., The Defense Department prevents foreign occupations of US territory, the Health and Human Services Department prevents disease from paralyzing the economy, etc.
                • Winston Smith 8495
                • Everywhere, NY
                Conservatives are wrong to push for deep, painful reductions to the "Safety Net" and federal retirement system. One of the benefits of our democracy is the ability to organize and set up programs that improve our quality of lives and reduce poverty. One important program is the Social Security Disability Insurance Program....sometimes because of injury or illness people lose the ability to work. First World countries don't let people with illness or disabilities die from poverty or lack of health care.
                • Concerned Citizen
                • Anywheresville, USA
                @Winston Smith: unfortunately, SSDI is one of the most horrifically abused programs, and I believe adds substantially to the national debt, and threatens an otherwise effective retirement program.

                Stats clearly show that SSDI enrollment has exploded over the past 15-20 years, and even more so in the last 4 years of economic collapse -- why? because if your unemployment runs out (or you just don't like to work), it is a generous "forever" income that you can't be fired from or lose. And once you are declared "disabled", you get everything from food stamps, to free health care, free phones, free bus passes, subsidized housing and so forth.

                Now -- obviously I support SSDI for the truly disabled....the quadriplegic, the person in an iron lung, the blind, the severely mentally ill.

                But that's not what we have. What we have is a system that rewards people with bogus complaints -- vague, unprovable claims of things like "chronic fatigue" or "fibromyalgia"....vague, unprovable conditions like "social anxiety syndrome" or "mild chronic depression".

                This is a scandal that undermines the security of our safety net. All recipients of SSDI should be examined on a regular basis, with strict standards and if they are not seriously ill or disabled, their benefits should be terminated immediately.
              • joannchartier
              • Oregon
              Wouldn't it be cool to see a similar breakdown of sectors of the economy and how they get their entitlements and who pays for them? I'm thinking of corporate agriculture (think King Corn) or corporate banking (think too big to fail banks gorging on less than 1 percent interest on money from the Fed) or Big Energy, willing to pollute everything to make a profit, and the ever popular Hedge Funds, objecting to a teeny tiny fee on computer assisted transactions that the little people can't hope to match, and the ever popular elected officials who have been trading on insider info, or the 'defense' contractors lobbying for an even larger share of government handouts and no bid contracts... you get the idea.

              Just listing all the parties who get these handouts, tax breaks, incentives, and actual rebates after paying no taxes (think GE) would have an effect similar to the casual drenching with pepper spray of peacefully sitting Occupy Wall Street protestors...

              That study might really shine a light on the city on the hill...
                • pnut7711
                • dirty south
                There is a great book called "Free Lunch" by David Cay Johnston covering this very topic.
              • MCS
              • Great Neck, NY
              It's amusing to see how upset commentators here are about counting Social Security as a welfare benefit. The dominant reasoning seems to be going something like this: If I get to enjoy it, and I paid taxes for it, its not part of the social safety net. Welfare benefits, on the other hand, are only transfers that someone else receives.

              The truth is that all government programs that take care of fundamental risks such as poor health, old age, unemployment etc. are part of the social safety net. Why do people choose to deny this? They want to have it both ways. What 'I' get is never welfare, but earned. What 'they' get is welfare, and not worth my tax dollars. Substitute 'blacks', 'minorities' or any demographic group that is the building block of a particular brand of bigotry.

              Government programs are valuable, for most of us. It is time to overcome prejudice, and pay up the taxes that makes this possible. For all of us.
                • Jim Ellsworth
                • Caldwell, TX
                I agree that Social Security is part of our social safety net but you lose me when you equate it with welfare. My social security is not related to your tax payments but rather to an investment I and my employer made over my working years in order to provide me with a retirement income. One proof of that is that my social security benefit is directly related to the number of quarters I paid in and to my salary level. My wife's payment is different than mine for the same reason.

                Social security for all but the first recipients is a mandatory retirement savings program.
                • Tom
                • Long Island
                It's amusing to see liberals, such as yourself, twist and contort rather than face the facts. Social security is not a welfare benefit, as Jim from Texas notes.
                If the article focused on true welfare costs it would be clear that Blacks and Hispanics receive more benefits than their percentage of the population. Illegitimacy rates amongst these groups dropped for a time after the 1996 welfare reform. Since then, however, the numbers have skyrocketed. Seehttp://www.washingtontimes.com/news/2006/dec/01/20061201-084845-1917r/
                According to the Institute for American Values, 38 percent of all American children are born illegitimate, and illegitimacy rates have doubled since 1975. The cost to taxpayers is $112 billion annually for anti-poverty, criminal justice, education programs, and lost tax revenue.
                What you call bigotry and prejudice is simply your great fear of being deemed politically incorrect.
              • JOHN
              • CINCINNATI
              To equate Social Security (a specific tax with a specific purpose) with transfer payments (payments made from general taxes) is a form of newspeak. The fact that the government has mismanaged the Social Security Trust does not suddenly change the intent - old age and disability payments funded by an additional tax.

              It is as different as a toll for a bridge and gasoline tax.
                • Anonymous BE
                • Belgium
                Social Security payments to the elderly who have paid into the system are a pension scheme, not part of the social safety net.

                Likewise, health insurance is not considered social safety net in most countries - even in the United States, health insurance such as Medicaid and Medicare are not exactly part of the social safety net.

                The social safety net consists of monetary and in-kind payments to those unable to economically provide for themselves.

                I don't mean to say that the fact that the United States has a pension scheme and universal health insurance for the elderly but not (yet) universal health insurance for the rest of the population nor much real social safety net does not bring up issues of fairness. But, Appelbaum and Gebeloff are mixing up categories here, making for a poor-quality analysis of the relevant issues.
                  • Paul
                  • Honolulu, HI
                  For the record, Social Security retirement benefits *are* means tested. Given how the benefit formula is structured, the lower a worker is paid, the higher his/her retirement benefit will be as a percentage of pay.

                  Assuming average life expectancy in retirement, lower-paid workers receive more money than they contributed to the system while higher-paid workers receive less than they contributed.

                  I'm not necessarily saying the current structure is fair or appropriate, I just want to ensure the facts are understood.
                    • alan
                    • holland pa
                    except that there clearly are NOT equal life expectancies. if you want to truly assess whether workers are getting a higher or lower percentage of retirement benefits/ tax paid, you actually have to sift through the data, not make assumptions. We know the life expectancy increase with income. I believe that such data has been collected and shows that in fact, the working poor end up collecting a significantly lower amount of benefits because of life expectancy than those in the upper echelons of earnings. (gao report here:http://www.ssa.gov/policy/docs/ssb/v65n1/v65n1p33.html) it is pretty technical but basically says that life expectancy differences lower lifetime benefits for those in lower incomes by 40%. look between table 6 and 7 for best explanation.
                    • Jonathan
                    • NYC
                    Not only that, high-income retirees do pay income tax on 85% of their SS benefits, plus they are charged extra for MediCare.
                  • ploatman
                  • Mechanicville NY
                  Then nothing is preventing you from reporting them to Social Securtity or your state insurance agency, whichever dispenses these benefits. You reporting will be confidential and you can pat yourself on the back for being a "good citizen." In New York we have had recent crackdowns on disability abuse, particlularly with retired railroad workers. The Times featured a big story about this abuse. Help your state get with the program. Remember-silence is consent if you know about abuse, fraud, and stealing of benefits.
                    • Concerned Citizen
                    • Anywheresville, USA
                    That sounds logical, but its impossible. I have tried to turn in several "fraudsters" but was laughed at by agencies. It is very difficult to prove. One of my neighbors was on full SSDI for "diabetic neuropathy" in his hands, but he worked regularly in the neighborhood as a handyman, often working in the cold or doing heavy jobs like hanging garage doors. Mysteriously, when there was money in the equation, his disability "disappeared". I tried reporting him, but no agency would even investigate -- and if they had, he would have simply denied everything (he worked for cash) and probably on a good show of how "crippled he was".

                    After you qualify for SSDI -- relatively easy to do, as many doctors are corrupt and will fill out any paperwork you request -- you are home free. They never check back, or demand you prove you are still sick or disabled! So you can "qualify" at age 18, and then collect a big check for 60 years with NO requirement you show you are still ill -- and remember, the check is just part of it. You get free health care, subsidized housing, free phones, free bus passes, and hundreds of dollars in food stamps! Probably more than half the people currently on SSDI are not really seriously ill or handicapped, and are bilking the system.
                  • Howie Schneider
                  • Orange Park Florida
                  It is the public sector lottery winner style crimes against humanity pensions stupid. There is nothing left for the poor becaue the public sector gets 6 to 29% or more of their pay going toward outrageous pensions. The engineers and scientists that put man on the moon got about 2% of their pay going toward a pension and no final 3 year or whatever average and no step raise nor even a raise every year in many cases and no guarantee from the government at all that the whole boondoggle would be paid because it was put in state or federal law by the public sector itself for itself with no vote by We the people..
                    • Paul '52
                    • New York, NY
                    • Verified
                    In the last 30 years we've shifted 15% of our nation's income to the 1% that was already at the top.

                    Thirty years ago the clear majority of households had workers, pubilc and private, with defined benefit pensions and employers overwhelmingly provided health insurance. Today, absent union "coercion," under 30% of private employers of people with high school diplomas provide health care, and no one gets a pension. Why? Someone's had to pay for the shift in income upwards.

                    This, somehow, is the fault of public employees?

                    Holding their own, that's a crime?

                    By the way, the pension 'boondoggle,' it precedes public employee unionization. And it should be changed, in several ways. But not by people who think that transfers of 15% to 1% are affordable while others holding their own are not.
                    • alan
                    • holland pa
                    howie,
                    just because the private employees of this country have gotten scr*wed by the loss of benefits over the past 30 years does not mean that the public employee pensions are wrong. if so, one could then argue that any worker, or for that matter, management, should not get more than the lowest paid person in the world at their job! and for the record, I am not a public employee, have no public pensions, etc.. But these arguments inevitably lead to the concept that any worker making more than a laborer in the far east is committing a crime against humanity. The american worker , public or private, has clearly had their wealth distributed from the middle class to the "wealthy". That is the "crime" , not some mailmans or teachers pension!
                    • Concerned Citizen
                    • Anywheresville, USA
                    @Paul '52: yes it is fundamentally different. Why? Because public employees can vote and financially support the very politicians who have a "yay or nay" ability to give the public employees their ridiculously lux benefits and pensions -- and they have rubber stamped huge increases in both for decades.

                    The private employee has no such sway with company management. Also, the public employee CANNOT have his/her job outsourced to China or India, while the private employee....well, we all know the end to that story, don't we?

                    The circumstances are not equal. Public employees should NOT have the right to unionize. They have abused this right for decades. Their unions are entirely corrupt.
                  • Mark T.
                  • New York NY
                  It is impossible to subsidize a large middle class on an enduring basis. It's one thing to ask the highest earners to pay a disproportionate share of their income to keep a bottom quartile out of abject poverty, but there isn't enough to do that and to give an additional 50-60% of the population a free ride too. If you have a large middle class, it inevitably has to pay its own way.
                    • Jonathan
                    • NYC
                    I argued in comments to yesterday's article that was what is really happening. The middle class is paying the taxes indirectly, but they are paying them. These 'benefits' are nothing more than a return of their own earnings.

                    Many economists believe that only consumption can be taxed. Any taxes placed on business and producers are passed on to consumers. Because the rich get the bulk of their income from business, directly or indirectly, then they are able to pass on any taxes they have to pay to their customers.

                    This is why middle-income people who vote to cut taxes on the rich are not really voting against their own interest. They know in a low-tax economy, their money will go farther.
                  • Mouse Woman of the Northwest Coast
                  • Washington State
                  Higher paid workers contribute more to Social Security while they're working--that's why they get larger benefits when they retire. Whether that's the right way to do it or not is open to debate--but it is a point that needs to be part of the discussion.
                    • JDKJJK
                    • NY NY
                    The reason there is no discussion on this point is because it destroys the argument that social security is a tax supported retirement program with an annuity that is determined by an individual's contributions. If it were to become means tested, as it is to a degree for lower income employees, its detractors will point out that SS is a "welfare program." It is further means tested by an individual or married couple's AGI; if you are above the minimum AGI your SS benefits are taxed at 80% of the benefit. In some instances a household's entire benefit can go towards paying their federal income taxes.
                    Medicare has no means testing and therefore anyone regardless of income will receive the same benefit, but again if it becomes means tested it essentially becomes a State subsidy for lower income individuals and can than be more easily classified as a welfare program.
                    • alan
                    • holland pa
                    taxes on earnings are capped at a relatively low income, so they do not pay anywhere near the % that middle and lower classes pay. in addition, the wealthy live longer thus collecting significantly more in lifetime benefits. Additionally , as soon as SS becomes means tested, it will quickly go the way of other welfare benefits and be demagogued as another tax that pays "the others". Means testing will lead to the inevitable end of social security. Social security is a dignified way that all americans can be taken care of in their old age (or disability), based on taxes they paid. It is not a annuity people purchase but rather a way to insure that our seniors don't go back to having to eat dog food because they outlive their savings! It is easily fixed by making periodic changes to retirement ages and taxable income caps. medicare is only controllable by allowing all americans to be included in it., thus giving the leverage to consumers/voters to control medical costs.
                    • Ozark Homesteader
                    • Arkansas
                    • Verified
                    There's a cap on their contributions.
                  • SteveRR
                  • undefined
                  This study – I presume – left out a key third column on the graph: What % of the total benefits were paid for by that particular group.
                  Considering that close to 50% of citizens pay no Federal tax, I expect that would add an interesting dimension to the analysis.
                  For comparison: The top 5 percent of Americans accounted for 37.4 percent of all wages in 2007. But they paid 60.6 percent of the country's total reported income taxes.
                  But I am sure that was just a simple oversight on your part??
                  ~ To what extent can truth endure incorporation? That is the question; that is the experiment. The Gay Science
                    • JDKJJK
                    • NY NY
                    And 4.5% of that 50% were millionaires.
                    • Ozark Homesteader
                    • Arkansas
                    • Verified
                    DPR is right and you are wrong. Furthermore, most federal taxes now are payroll taxes, which middle and lower income workers pay disproportionately as part of their income.
                    • ClearEye
                    • Princeton, NJ
                    Federal trust funds (Social Security, most of Medicare), largely financed by payroll taxes, have been in surplus for each of the past 40 years and are projected to continue to be in surplus for years to come.

                    On the other hand, activities funded by personal income and other taxes, have been in deficit for all but one of the past 40 years, with the gap increasing sharply since 2001.

                    As personal income tax rates were reduced, payroll tax rates were increased to the point that they were essentially equal as sources of Federal revenue in 2010.

                    The above can verified at www.budget.gov, Historical Tables

                    Simpson-Bowles demonstrated that Social Security can be kept viable for at least another 75 years with incremental changes over time. Medicare requires more serious change, which, if done right, could provide better care at less cost.

                    These are discussions that are needed, but difficult to have because we are so unaccustomed to dealing honestly with one another.
                  • R. Law
                  • Florida
                  This is one of those articles that removes the blinders and reveals who depends on the government.

                  It is a most important piece of de-bunking, which we hope all Democrats and progressives use to good advantage over and over and over in Congress, on talk shows and in debates this year.

                  It serves to show the voters who we are instead of the (now) provable demagoguery polluting our dialogue.
                    • ART
                    • Weston, MA
                    Thanks for the information. It is really helpful to know who gets what share of the safety net.
                      • cc
                      • CT
                      Yikes! An "F" on Economics 101. What is the per capita distribution
                        • JDKJJK
                        • NY NY
                        The per capita distribution is as meaningless as per capita income(e.g. the total population is 10 people, one person makes 900K, the remaining 9, make 10K each, therefore the total per capita income is 100K, yet tell that to the nine people making 10k per year).
                        The net percentage of what group receives the highest percentage of of federally allocated "safety net" dollars is more informative than per capita distribution.
                      • dmckj
                      • arizona
                      It is remarkable to me that 'conservatives', those who, in theory, have a strong recollection of history, continue to tout both that a) we have a huge welfare state problem, and b) that any welfare state is a bad thing.

                      The whole point of Social Security and Medicare was to prevent the eldery from dying destitute in the streets or leaving their offspring in perpetual servitude. These programs served brilliantly to end both.

                      The whole reason for NOT eliminating these programs is that people routinely make very bad choices, spending their monies down to zero prior to the times that they need the savings most. These programs are, in theory, one of forced savings for future needs.

                      The U.S. would look like a Dickensian horror show, especially during the retirement decades of the baby boomers, if it weren't for these programs.

                      Anyone arguing for the alternatives needs to wake up to these realities, but, probably, they're mostly Scrooges anyway and simply don't care.
                        • jim l
                        • New York
                        Mark T., despite the constant hand-wringing on this issue, the national debt doesn't really work like a overdrawn checking account. Looked at from a national perspective, for every "debt" you pass on to the future, someone else in the future will receive a credit. Yes, there is the issue of debt owed to China and other nations, but the vast majority of the debt we are running up for future generations Americans will be paid out...to future generations of Americans.

                        The real question is whether we are using the debt to invest wisely in our future or not.

                        For example, If you borrow $1 million to purchase a million dollar factory, the fact that you have incurred a debt isn't bad so long as the factory is productive. In fact, if your product is in demand, then the more you borrow, the more profit you make, right? That's the purpose of investment. On the other hand, if you are frugal and simply stick your money under the mattress, it will inevitably decrease in value over time. The national economy works that way as well. If we invest the fruits of our labor well, we can profit and lead to an increase in the standard of living. But if we tear up our safety net for the sake of incurring no debt, we will find our infrastructure slowly decaying, our people becoming less healthy and less educated, and America slipping further and further behind nations that look out for their citizens.
                        • Linda
                        • Phoenix
                        People are confused by the lies of the right wing- Medicare and Social Security are not the biggest problem for debt- wars and the fact that huge companies pay little taxes-Bush ran two wars and never counted the cost in any budget! And then lowered taxes on those who have the most ability to pay. Halliburton received 40 cents on every dollar spent in Iraq- war profiteering, lobbies for weapons manufacturers , health insurers who charge outrageous premiums with ridiculous deduction requirements, and the robbery of people's biggest investment, their homes, by banks that told us our houses were worth three times as much as they really were -
                        The right wing blames the poor people and the old people and the children when it is their policies, lack of concern for citizens, dedication to war on every dispute that has put us where we are.
                        • Mark T.
                        • New York NY
                        Jim I or L

                        There is no comparison between a capital investment in a productive factory and Medicare. Most Medicare dollars goes to people who by and large aren't working and won't ever again; 20% goes to people who die within one year. It's just a transfer, it has nothing to add to national wealth or productivity.

                        And you miss the point, which is not should there be a safety net for poor, elderly, disabled, but should the bulk of the population be net subsidy receivers. An economy can't last on that basis.
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