One Nation, on the Dole

By John Sununu Monday, Aug. 08, 2011

Accusations fly about cutting tuition grants, Medicare, veterans' benefits and food stamps. It's a litany that raises a simple question, Who isn't getting a government check?

We all know the nation's budget is huge, but nothing drives the point home like the number of Americans receiving financial support. Add Medicaid, farm payments, housing subsidies and others to the list, and roughly 47% of all Americans are receiving at least one federal benefit. Tax preferences, like the deductions for mortgage interest, retirement savings and health care, bring the number closer to 75%. The dirty little secret about America is that being on the dole is no longer the exception but the rule.

The concept of providing payments to individuals didn't figure very prominently in the national dialogue until the early 20th century. Roosevelt's New Deal laid a foundation for federal assistance ranging from Social Security to direct farm payments, and programs like the 1935 Aid to Families with Dependent Children helped cement this trend. Government tailored these early programs narrowly, targeting the oldest or poorest citizens. Often they were viewed as temporary. In the immediate postwar years, federal spending consumed only 15% of GDP, but today it has ballooned to more than 24%.

Federal largesse touches just about everyone and changes the behavior of just about everyone it touches. The first casualty is resolve. Easy spending drains our political class of its ability to say no. Funding for job training? It sounds great. Now we have over two dozen different programs that are redundant, poorly targeted and uncoordinated. Pushing for more spending is also the easiest way to show that you're getting something done. Call it pandering, playing to the press or just good politics — it's something that elected officials find tough, and sometimes impossible, to resist.

Recipients' behavior changes over time as well. Whether or not they would ever have proposed particular programs, beneficiaries soon become comfortable with the status quo. No one ever stands up to say "No, thank you" or "I don't deserve this." Mohair producers, ethanol blenders and wealthy Social Security recipients might fail the laugh test, but they can chuckle all the way to the bank. Their checks are backed by the full faith and credit of the United States.

Sooner or later, vested interests begin gaming the system. Alpaca farmers suddenly appear in the New Jersey suburbs to take advantage of generous tax credits. Powerful associations of aircraft owners or railroad retirees spring up to unite recipients and lobby for more funds. Their lobbyists in Washington, dependent on the funding streams for their livelihood, do everything possible to magnify the importance of the money flow. It becomes a self-sustaining cycle in which programs survive not because they are still needed but because they create reliable constituencies at election time.

Two generations of this behavior has led right to where we are: with credit-rating agencies talking publicly about downgrading U.S. Treasury debt. It's a self-inflicted wound. With 47% of Americans receiving benefits, common sense tells us that many recipients already have above-average income. Where exactly are we headed? Placing 60% of Americans on public benefits can't possibly make economic sense unless the goal is to redistribute wealth or manipulate personal behavior.

Ultimately, the biggest casualty is the ideal of independence. Voters today are characterized according to the programs from which they benefit. Instead of Americans, we are retirees, veterans, farmers, teachers, investors and students. We have become a nation of spending constituencies. In doing so, we've lost a piece of our individual identity and become more complacent about the role of government in our lives. I doubt that most Americans would say they need government support to survive. Very few would agree that dependence on government support is a positive thing.

We will always and should always respond to those in genuine need. But as a society, we should also be willing to ask, How much government dependence is too much? How much can we afford? If nothing else, the debt-ceiling debate has begun to bring these questions into focus. And no matter how poor the choreography of the fight, if it highlights the risks and social cost of growing numbers of government dependents, it may prove to have been worth the spectacle.