Heads up to all you people who Obama promised to help. Gotcha! Individual Payments Swell Under Obama Check-writing outlays up 29% in U.S. budget, but poor’s share falling BY JOHN MERLINE INVESTORS BUSINESS DAILY Buried deep in a section of President Obama’s budget, released this week, is an eye-opening fact: This year, 70% of all the money the federal government spends will be in the form of direct payments to individuals, an all-time high. In effect, the government has become primarily a massive money-transfer machine, taking $2.6 trillion from some and handing it back out to others. These government transfers now account for 15% of GDP, another all-time high. In 1991, direct payments accounted for less than half the budget and 10% of GDP. What’s more, the cost of these direct payments is exploding. Even after adjusting for inflation, they’ve shot up 29% under Obama. ObamaCare, Medicare... Where do these checks go? The biggest chunk, 38.6%, goes to pay health bills, either through Medicare, Medicaid or ObamaCare. A third goes out in the form of Social Security checks. Only 21% goes toward poverty programs — or “income security” as it’s labeled in the budget — and a mere 5% ends up in the hands of veterans. Interestingly, despite Obama’s frequent pledges to reduce income inequality, the share of direct payments going toward “income security” has dropped from 25% in 2009 to 20% in 2014. (The average share from 1980 to 2008 was 25.4%.) Obama’s Fiscal Year 2015 budget calls for this share to drop to just 17% by 2019, as his programs devote more and more federal tax money to middle-class entitlement programs such as ObamaCare. Here’s another way to look at it: If all these federal direct payments went only to the poor, every person living in poverty today would receive an annual check worth $55,900. The 1% Handouts Instead, a surprisingly large amount of federal money is handed out to wealthy Americans through Social Security, Medicare, farm subsidies, unemployment benefits, conservation programs, disaster payments and other programs. An IBD analysis found that the richest 1% of Americans, in fact, receive roughly $10 billion each year in federal checks. Outgoing Sen. Tom Coburn, R-Okla., who exposed these vast payment programs available to the rich, said “this reverse Robin Hood-style of wealth distribution is an intentional effort to get all Americans bought into a system where everyone appears to benefit.” The White House normally releases the Historical Tables section of the budget — where these direct payment numbers are detailed — along with the rest of the budget documents. But while Obama released the main parts of his 2015 budget last week, he delayed the release of this little-noticed section until this week. The Historical Tables also expose as false Obama’s promise that ObamaCare would rein in federal health care spending. Obama, in fact, adds a new spending category to the budget — called “health insurance assistance” — which will total $456 billion through 2019, with annual spending levels topping $100 billion in the years after that. What’s more, overall federal health spending in 2019 will be nearly twice as high as it was in 2008, and will account for 30% of all federal outlays (up from 25% in 2008). Another overlooked item in Obama’s budget: He expects immigration reform to cost hundreds of billions of dollars. Page 170 of the Summary Tables, released last week, includes a new entitlement spending category called “allowances for immigration reform.” Over the next decade, Obama puts $298 billion into this category, with annual costs hitting $56 billion a year by 2024, and rising. (This does not include possible higher tax revenue and economic growth from immigration reform.) Budget Cuts Harder This massive shift in federal spending toward direct payments to individuals not only balloons the size of the federal government, it makes cutting the budget all the harder, since any meaningful spending reductions will invariably mean cutting back on some of these checkwriting programs. The Congressional Budget Office figures that, by 2038, Medicare and Social Security alone will eat up 42% of the budget. The explosive growth in these direct-payment programs is also squeezing traditional government functions, such as national defense, which Obama wants to sharply cut. His budget calls for Pentagon spending to drop from $623 billion in 2015 to $570 billion in 2017.
Posted on: Tue, 11 Mar 2014 13:09:15 +0000
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