PLANK SEPTEMBER 18, 2012
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Will Moocherpalooza have an impact on the presidential campaign? It might. Mitt Romney, Paul Ryan and their allies have been decrying the “entitlement society” and supposedly low number of Americans paying federal taxes for some time now. But the specific language and circumstances of Romney’s comments at a May fundraiser, first reported in Mother Jones on Monday, may capture the attention of average Americans in a way those previous speeches and writings did not.
The episode may also undermine Romney’s support among members of a Republican elite that was already wary of him. Politically speaking, the most significant op-ed on Tuesday wasn’t the even-keeled critique of Romney by David Brooks, a conservative who cares about ideas. It was the more caustic and, apparently, more exasperated blast from Bill Kristol, a conservative who cares about winning elections. That’s going to resonate with the surrogates, strategists, and financiers whose support Romney desperately needs to remain competitive.
But, in the long run, whether this episode affects perceptions of Romney may matter less than whether it affects perceptions of government.
Romney’s argument is actually an amalgam of two separate, although related, claims that you hear all the time in conservative circles. The first is about who pays taxes and, more important, who does not. Romney pointed out that, today, 47 percent of Americans don’t pay federal income taxes. But Romney neglected to point out that most people still pay federal payroll taxes and state taxes, both of which are regressive. And most of the people who don’t pay income taxes now either paid them in the past or will pay them in the future. Romney really has no excuse for making this argument; critics, among them my valiant and persistent colleague Timothy Noah, have been pointing out these omissions for months. (And that's not to mention the fact that Romney himself pays relatively little in taxes, since he relies heavily on investment income that is subject to lower rates and can be easily sheltered.)
The other claim might seem the more defensible of the two: It’s the argument that many more people have become dependent on government programs, placing unsustainable claims on the federal treasury and reducing incentives to work. A seminal text for this argument is “A Nation of Takers: America’s Entitlement Epidemic,” an essay by Nicholas Eberstadt of the American Enterprise Institute. Its key piece of evidence is the observation that, since 1960, “government transfers to individuals” have risen sharply. According to Eberstadt,
What is monumentally new about the American state today is the vast and colossal empire of entitlement payments that it protects, manages, and finances. Within living memory, the government of the United States has become an entitlements machine. As a day-to-day operation, the U.S. government devotes more attention and resources to the public transfers of money, goods, and services to individual citizens than to any other objective: and for the federal government, these amounts outpace those spent for all other ends combined.
Mark Schmitt, a regular contributor to TNR and senior fellow at the Roosevelt Institute, wrote an elegant critique of Eberstadt’s argument. So did Lane Kenworthy, a sociologist at the University of Arizona. As they note, Eberstadt is correct when he says that the entitlement state has expanded significantly in the last 50 years. But that increase reflects two factors more than anything else: Health care and old people. (Relatively speaking, the cost of low income programs outside of health care is actually declining.) In 1965, with the enactment of Medicare and Medicaid, the federal government assumed responsibility for financing medical care for the elderly, as well as the poor and disabled. It also boosted Social Security payments to provide more of the elderly with adequate incomes. The aging of the population and rising cost of medical care have made these propositions significantly more expensive over time.
Are the people who benefit from these programs today takers rather than makers? Hardly. Most of these people contributed what they could towards he cost of these programs, via payroll taxes, during their working years. If they don’t contribute now—and, remember, the majority of them still contribute something, since Medicare has both cost-sharing and premiums—it’s because they are no longer capable of doing so. They’re too old or disabled to work, and their fixed incomes leave them relatively poor. As Jared Bernstein of the Center on Budget and Policy Priorities reminded me recently, median income for Medicare and Social Security beneficiaries is about $25,000.
The growth of these programs has placed significant new demands on the federal budget. That’s why there should be, and has been, a vibrant debate about how to make the programs sustainable, whether by reducing the money they send out or increasing the money they take in. The growth of other, more narrowly tailored programs (like welfare) has also contributed to the fiscal strain, although far less significantly. That’s why there should be, and has been, an equally vibrant debate about who is eligible for these particular programs and under what conditions they should get them. More nuanced conservatives, among them Brooks, Ross Douthat, and Ramesh Ponnuru, have been part of these discussions for some time.
But the fact that the entitlement state has grown shouldn’t, by itself, alarm us. It’s actually a sign of progress, because it’s a reminder that the government has stepped in to do what the market would not. We saw, in the years before Social Security, what the world looks like when seniors don’t have adequate pensions. And we saw, in the years before Medicare and Medicaid and (now) the Affordable Care Act, what the world looks like when people can’t afford to pay their medical bills. It was not pretty. But the price for addressing those failures was the creation of some massive government programs. They cost a lot of money, yes, but we all benefit from them at some point, as Schmitt noted in his essay: “Most of us, other than the permanently disabled, are givers and takers to government, because that’s what it is to be part of a community or a nation.”
That’s really the point I hope people take away from this episode, if not in the next few weeks that preceed the election than in the months and years that follow. If the polls are right, the voters today are pretty skeptical of government, at least relative to what they were up through the 1960s. But the voters also believe government should make sure the elderly and poor have health care. They believe government should provide pensions through Social Security. They even believe government should guarantee that everybody has food and shelter, as the Washington Post’s Suzy Khimm pointed out on Tuesday. With any luck, Romney’s controversial comments will get people to think about these contradictions—and to realize that they like government a lot more than they seem to realize.
Update: For more along these themes, see David Dayen and Greg Sargent, who note that Romney was essentially challenging the "very ideas of the social contract."
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19 comments
That picture alone is proof enough that romney is not qualified to be President, if this is how he looks because of a political gaffe I shudder to think how he would react to a genuine crisis. Compare that to Obama at the comedy roast after he had given the order to kill OBL and before the results came in, the man has balls of steel (hell, the whole lot of them in his administration does, including Hillary)
- blackton
September 19, 2012 at 8:19am
Very eloquent. Well done. Unfortunately, conservatives, including (especially) conservative policy elites, aren't empiricists, at least when it comes to effective government services. David Brooks has been much given credit for yesterday's Thurston Howell op/ed, but this is how he concluded his op/ed: "He’s running a depressingly inept presidential campaign. Mr. Romney, your entitlement reform ideas are essential, but when will the incompetence stop?" Yep, Romney's problem is a defective campaign, not a defective policy that he is trying to sell to an unsuspecting electorate. My point is that Romney, and policy elites who support him, including Brooks, aren't interested in making improvements to social programs by use of empiricism; they want to destroy them, all at once if they can, little by little if they can't. [As for Bill Kristol, as Cohn points out, he "cares about winning elections", winning elections in order to promote his neocon foreign policy ideas; to Kristol, domestic policy has value only to the extent it affects the foreign policy ideas he promotes.] If a well crafted defense of social programs won't work, what will? Fear. Fear, as I have learned in my life, is by far the greatest motivator. And fear is what many if not most of the baby boomers are experiencing as they approach retirement, as their savings have dropped precipitously in value, savings as reflected in stock portfolios and homes. It's appeals to fear that the Republicans have used so effectively, shamelessly creating a generational conflict. Yet, it's the Democrats, and their defense of social programs, who should benefit from the fear among baby boomers. Of course, Obama is about hope, not fear, about calm in the midst of crisis. How can a campaign built around Obama tap into the fear of the baby boomers without abandoning, and possibly destroying, the Obama mystique? Now that's a conundrum for which the other Cohn may have an answer.
- rayward
September 19, 2012 at 8:26am
To sum up Robme's beliefs, people who go to the mailbox to collect dividends, trust fund disbursements, and golden parachutes should be admired, well okay, worshipped. But people who work all day in the very worst and lowest paying jobs, like janitors and garbage collectors, and then receive some government benefits in their mailboxes, are to be shunned and derided? And after GOPers "worked" for twenty solid years to lower taxes, now they are incensed by all the people not paying taxes? Isn't that their stated raison d'etre? I'll give them one thing, they do make it hard to keep up with their pingponging positions. And when Mittstake needs to be concerned about referencing a map is likely to arise during the debates. After all, I am pretty sure he can see Mexico from atop his car garage in LaJolla. And he is so generous and nice to Mexico, and respectful of Latinos, after they accepted his rebellious relatives who insisted on keeping all their wives, after that little insurrection his people started in Utah when staging that insurrection against the US government for that new no polygamy rule. It is certainly easy to see why he considers himself so superior to all of us.
- smabry03
September 19, 2012 at 8:27am
So, before he was for the 47%, he was against them. But good catch on the 53% also being moochers. Actually, the key word in Romney's speech was "Entitlements". These "Entitled" people think they're "Entitled" to Government largess while they remain lazy, thus they don't deserve their "Entitlements". The next step, of course, is to balance the budget by taking away their "Entitlements" and giving them as tax breaks to the "Job Creators". This will force them to be less lazy, as they work or starve. Dickens would be so proud. But the whole thing is based on a pernicious falsehood, and policies based on this falsehood would be pernicious as well.
- AllanL5
September 19, 2012 at 8:45am
Romney's 47 percent gaffe was plainly stupid. And as Cohn points out, so is the follow-up argument that it's really about government "dependency." It's really an astonishing claim that our society has become a quasi-socialist state--a true tea-party sentiment. The problem for Romney is he's restricted from articulating this argument any other way. Instead of the right-wing socialism argument, he could simply say that many of these programs cost more than the tax dollars that support them. But then that makes the unpalatable solution he's offering clear: he's not going to raise taxes to support these programs, he's going to cut their spending. If he or his campaign were smarter, they would focus on Ryan's approach, which is not to directly cut spending, but to restructure the programs so that spending cuts follow. They'd have to improve on Ryan's approach, which is still too obviously harsh, but it's the clear way to go for them. I think this is part of why Brooks as well as Kristol are upset at Romney. Instead of trying to convince beneficiaries that the Romney/Ryan plans are what's necessary, they're writing off the beneficiaries and both endangering GOP power and GOP goals.
- polcereal
September 19, 2012 at 11:17am
It's ironic the GOP wants to elect to the Presidency someone who says those who received govt aid are moochers (even though his Bain Corporation got $10,000,000 in FDIC bailout money), and that everyone who doesn't pay federal income taxes is a moocher (even though he would pay zero federal income taxes under the GOP tax plan.) And millions are gonna vote for this guy. Astonishing.
- bpuharic
September 19, 2012 at 11:29am
Jonathan: David Brooks is not a conservative. What is your definition of a conservative, Bill Clinton? David Brooks, at best, is slightly left of center. Brooks supported Obama in 2008 and probably supports him in 2012.
- john336
September 19, 2012 at 11:32am
I'm STILL patiently awaiting Nicholas Eberstadt's seminal text “A Nation of Takers II: American Corporations and Their Executives Entitlement Epidemic." Waiting, and waiting. . . Some may say subsidies to corporations or the "little people" as I'm fond of calling them, accrue to all Americans. However, because executives play a rigged compensation game, most of those supposed benefits are disproportionately directed upwards towards executives, when it could go to higher wages, or reduce the expense of creating and administering defined benefit pensions instead of those ripoff 401Ks. (Which were originally designed for Kodak parasites, er, executives to suck more money out of the corporation. Then realizing 401Ks were cheaper foisted that crap on workers.) Or corporations could purchase better health insurance for their employees. (For which they already receive a subsidy.) In any event, one dollar should go to buying something that benefits many people, not a few execs. Moreover, up to 80 percent of the tax code applies to corporations. Anyone want to bet those hundreds of additional pages contain methods for the IRS to extract more money from the rich individuals and corporations? No takers right? And when the 47 percent pay their taxes doesn't that fund tax expenditures the benefit mainly. . .? Not the 47 percenters, I'll bet.
- tec619
September 19, 2012 at 1:02pm
THis just in: Follow @politicalwire September 19, 2012 Romney's Father was on Welfare BuzzFeed finds an amazing 1962 video in which Lenore Romney talks about why her husband George would be a good governor of Michigan in part because he was once "on relief -- welfare relief -- for the first years of his life." Here's the video:
- tec619
September 19, 2012 at 1:02pm
I reside in the part of the country where acts of piety are more common than the mosquitoes; indeed, every successful business plan includes acts of piety. I've worn the same Saint Christopher medal around my neck for over 45 years (I got it as a gift before he was demoted by the Church). Of course, few actually know that I wear it. I suppose the outward manifestations of my faith that I practice today are the same as those I learned as a child from my mother, who didn't much care for superficial expressions of faith (although she wouldn't enter the Church without something covering her head). She very much believed in the message in Matthew 6. As for Romney and his rich friends at Leder's house, I might suggest they consider the Epistle (Letter) of James (Brother of Jesus), where he says: "Let the lowly brother boast in his exaltation, and the rich in his humiliation, because like the flower of the grass he will pass away. For the sun rises with its scorching heat and withers the grass; its flower falls, and its beauty perishes. So will the rich man fade away in the midst of his pursuits".
- rayward
September 19, 2012 at 1:58pm
Cohn is wrong - again 1. Romney is correct to focus on Federal Income Tax -- taxes that pay for the 'common good' 2. Payroll 'taxes' are fundamentally different that Federal Income taxes -- essentially defined contribution benefits 3. Payroll taxes and the benefits you received from them -- are not regressive at all. e.g., Lower income folks receive far more from Soc Sec than high income folks at same contribution levels. 4. The Gov does an unbelievably terrible job at Soc Sec - returning something like 1.3% IRR --- A 40 year target retirement fund would return 8-10% and eliminate senior poverty. 5. There is no market failure that Soc Sec and Medicare addressing --- just Gov programs mutated well beyond original intent into the unsustainable entitlements they have become 6. ..... I do appreciate the appeal of the Democrats strategy though -- by creating more public sector parasites sucking at teat of Gov, they increase Democratic voters. In long run, this is not good for the parasites or the US. And ultimately this imbalance will be corrected. Tail will stop wagging the dog.
- mr_rationale
September 19, 2012 at 2:25pm
Romney is 65 and probably on medicare like everyone else his age.
- laurig
September 19, 2012 at 6:05pm
How many of the people who do not pay income tax work for current of former Bain managed companies? If you want people to pay income tax you have to pay them.
- laurig
September 19, 2012 at 6:12pm
mr_rationale: Social Security is an investment fund? Who knew!?
- tec619
September 19, 2012 at 6:14pm
rayward: If Romney and all those so-called christian conservatives really believed the writings of the bible they would heed the Jesus' admonition in Matthew 19:24: "And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God."
- tec619
September 19, 2012 at 6:21pm
New campaign logo for Romney: camel going through a needle and becoming a Mormon godlet.
- skahn
September 20, 2012 at 12:23am
Rat, You really have not the slightest idea what you are talking about. All you do is repeat, repeat, repeat utterly moronic libertarian pseudo-economic talking points. Social security is not an investment fund. The Federal government has the ability to take whatever share of GDP it wants in order to pay pensions. Current revenues fund the government; the government's "savings" of its own debt is an accounting device that has no economic meaning. Right now, it preferentially takes money from workers. That is a political choice, not an economic necessity. If retirees are going to eat and have medical care, that will consume a share of national output, no matter whether it is paid for publicly privately. If, as you claim sustenance and medical care for retirees are unsustainable, that is not a finance problem, but a real problem which will require putting the elderly out on ice floes. Since the US manifestly is wealthy enough to support retirees, and is far from full employment, the only issue is how to finance. It is certainly the case that our current system of regressive taxation, taxing only labor and on a regressive basis, will not be sufficient to finance retirement benefits. The solution is to "broaden the tax base" and include income from capital and tax the lot on a progressive rather than regressive basis. You of course don't want to do that, because you believe the same Randian excrement that Romney believes. But don't carry on that that is some kind of economic necessity. It is your perverted choice to screw your fellow man and leave him or her lying dead in a ditch. Nothing more, nothing less. Stop talking about economics, rat. You bore me.
- roidubouloi
September 20, 2012 at 8:14am
It should be mentioned, that prior to 2000, we had a balanced budget. It wasn't "Entitlements" that caused the budget deficit, it was tax-cutting by Bush-II and two unfunded wars. Using the budget deficit as justification to cut "Entitlements" is robbing Peter to pay Paul. Despite Republican talking points, what we have IS a "Revenue Problem", and it should be solved by sun-setting the Bush Tax-Cuts as a start.
- AllanL5
September 20, 2012 at 10:52am
Allan is correct. We a future problem of funding entitlements. The current problem is due to Bush's tax cuts, compounded by Bush's unfounded wars, compounded by Bush's recession, with a soupçon of Bush's unfunded drug benefits and partial privatization of Medicare.
- roidubouloi
September 20, 2012 at 3:17pm