December 19, 2014

Uncle Sam’s Check Is Often In the Mail

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Many Americans ask why it is so difficult to rein in federal spending. Former U.S. Sen. John Danforth and Concord Coalition Executive Director Robert L. Bixby have a suggestion: “Perhaps they should look in the mirror.”

That’s because nearly two thirds of the U.S. budget consists of “transfer payments,” which are checks written to Americans, or written on their behalf for things like medical care. In 1940 such payments made up only 18 percent of the budget.

Because only a fourth of last year’s transfer payments were related to need, Bixby and Danforth write in a recent op-ed for Bloomberg Government, fiscal reform “need not devastate low-income Americans.”

The five largest transfer payment programs last year: Social Security, Medicare, Medicaid, benefits for retired federal employees and benefits for the unemployed.

Washington also paid its current civilian and military employees $447 billion last year. That number plus transfer payments totals $2.73 trillion in checks written to individuals or on their behalf. Danforth and Bixby also note that individuals receive most of the $1 trillion in subsidies that are written into the tax code.

“Responsible fiscal policy,” they say, “will depend on citizens who demand fewer benefits from their government and on politicians who focus more on the long term good of the country than on the next election.”