Leaders debate budget cuts; NC got $69 billion from U.S. in 2011

North Carolinians got $69 billion in federal benefits in 2011

McClatchy NewspapersDecember 13, 2012 

Percentage of government transfer payments of total income by North Carolina county.

N&O GRAPHIC

— Don’t mess with Big Bird. And don’t even think about touching Medicare.

Republican presidential hopeful Mitt Romney ran into a brick wall of protests and ridicule when he proposed ending subsidies for Big Bird parent the Public Broadcasting Service as one small step toward curbing runaway budget deficits.

Now advocacy groups warn that cuts to Medicare or any other part of the nation’s social safety net, even reductions in projected increases, would be devastating.

As President Barack Obama and Congress debate ways to avert a pending fiscal crisis, the country broadly agrees that they need to cut federal budget deficits. There’s solid support for raising taxes on the wealthy, but those tax increases alone wouldn’t solve the problem. And cutting spending is extremely difficult.

Look in the mirror for the key to the problem: An ever-increasing number of Americans get a piece of federal spending.

Nearly 150 million Americans – 49 percent – receive some government benefit. That includes Social Security, veterans benefits, Medicare or Medicaid and food stamps, according to Census Bureau figures from last year, the most recent available.

Among them:

• 80 million get help from Medicaid, the health insurance for the poor.

• 49 million get Social Security.

• 48 million get food stamps.

• 45 million get Medicare.

Beyond that, there are price supports for farmers; money for schools; road, bridge and highway construction programs that employ thousands; popular public broadcasting shows.

In 2011, North Carolinians collected roughly $69.1 billion in government assistance. Payments stem from a list of programs, including Medicaid, Medicare, unemployment, disability, veterans assistance and food stamps.

Nationwide, government programs awarded $2.2 trillion to residents last year, according to estimates from the U.S. Bureau of Economic Analysis. The monies make up a large chunk of some people’s income.

“It’s really quite simple: People who get the spending like to keep getting it,” veteran Washington budget analyst Stan Collender said. “Almost any spending that’s still in the budget has substantial political support.”

Numerous polls show widespread enthusiasm for cutting spending in general, but there’s resistance to specific trims, Collender said.

“With the possible exception of foreign aid, and every once in a while NASA, almost nothing has a majority of support for cutting,” Collender said. “If you read the public opinion polls, Americans don’t want their government to do less; they just want it to cost less.”

Indeed, a recent McClatchy-Marist Poll found overwhelming opposition to every option mentioned to cut spending. Fully 85 percent of voters oppose any reductions in Medicare, for example. Fifty-nine percent oppose raising the eligibility age for Medicare. The opposition cuts across party lines, with a majority of Republicans joining Democrats in opposing cuts to Medicare or Medicaid.

The personal stake in the federal budget has grown by leaps and bounds since the creation of Medicare in the 1960s and the expansion of it to cover prescription drugs in the past decade.

Federal spending sent to individuals for entitlements such as food stamps, Medicaid, Medicare and Social Security has more than doubled as a share of the federal budget, from 25 percent in 1960 to more than 60 percent today.

Erskine Bowles, a former UNC system president and Clinton White House chief of staff who co-chaired a bipartisan budget commission, said the broad vested interest made it difficult to cut spending.

“Everybody is like my Mama,” who wants the problem fixed without touching Medicare, Bowles said. Politicians say they want to trim spending, “except the thing that’s important to them,” he said. “This doesn’t get easier; it gets harder when you let every interest group say, ‘Don’t touch my thing.’ ”

Entitlements are particularly tricky. Millions of people paid taxes into the system to qualify for the benefits, and the programs are credited with lifting millions out of poverty.

Though experts expect a recent spike in food stamps and other anti-poverty efforts to level off as the economy improves, most of the increases in federal spending have been in Medicare and Medicaid, as health care costs escalate.

“Our increased spending isn’t necessarily a case of waste or of Congress spending like drunken sailors. It’s happening because providing an increasingly expensive service to an increasing number of people is increasingly expensive,” said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget-research group.

It’s predicted only to grow as baby boomers age into the system. The Congressional Budget Office warned in June that boomers will create a “significant and sustained increase” and that “providing the health care services and retirement and disability benefits that people are accustomed to will consume a greater share of the economy in the future than it did in the past.”

But the entitlement programs pack a powerful political punch.

“We all hear, ‘My opponent will cut your Medicare. Grandma is going to be eating cat food,’ ” Bixby said. “One of the reasons that it’s difficult to hold a good, honest discussion about these programs is because the changes are so easily demagogued.”

All spending has its champions, said Steve Ellis, the chief budget analyst for the nonpartisan anti-spending group Taxpayers for Common Sense.

“The spending didn’t get there out of nowhere. Somebody pushed for it at some time,” he said. And interest groups “ardently defend it,” lobbying members of Congress and the executive branch.

Spending often begets more spending. When Brazil won a trade fight at the World Trade Organization over subsidies the U.S. pays to cotton farmers, U.S. lawmakers didn’t pull the plug. Instead, the U.S. now pays more than $100 million a year to Brazilian cotton farmers through the Brazil Cotton Institute.

“Here in the U.S. we’re willing to bribe another country rather than actually cut some spending,” Ellis said.

Despite reports of inefficiencies and redundancies, Ellis said only a few costly military weapons programs had been eliminated, including the Comanche helicopter and an alternate engine for the Joint Strike Fighter.

“And it took a lot of blood, sweat and tears, years of work and years of fighting,” Ellis said. “There are a lot of moneyed interests behind all these programs.”

Charlotte Observer staff writer Gavin Off contributed.

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