Reforming the Entitled

In recent decades (yes, decades), much has been said about reforming the cumbersome entitlement programs that have ballooned since first inception. A few dabbles at reform have been relatively successful, but political posturing especially during election periods reveals a lack of honesty and will when it comes to REAL reform.

That being said, the entitlement reform that is the topic of this post is “political entitlement.” Performing a few hits on a search engine, I learned that the politicians, serial killers, and sociopaths share several similar traits. One of these shared traits is a “grand sense of entitlement.” I give you Lisa Murkowski, Charlie Crist, and Charlie Rangel.

Not only do politicians in Washington feel they are entitled to keep the seats held by their respective states, but they also vote for themselves rather extravagant benefits at the expense of the taxpayer.

Though it’s oft told, it is not true that our elected officials are not participants in Social Security. Since the early 1980s they have been. As well, the 1980s brought reforms to the basic retirement options in which they can participate. What IS true and alarming is that after five years of service, a member of Congress will be entitled to a retirement check. Of course, rules apply based on age, years of service, and so on. In final analysis though, “Congressional pension benefits are 2-3 times more generous than what a similarly-salaried executive could expect to receive upon retiring from the private sector.”

Many of you may remember (SHOULD remember!) the President stating that all Americans should have the healthcare insurance options that those in Washington have. Ahh, to be so fortunate. They actually get:
• a choice of 10 healthcare plans that provide access to a national network of doctors, as well as several HMOs that serve each member's home state.
• special treatment at Washington's federal medical facilities
• access to their own pharmacy, doctors, nurses and medical technicians in an office conveniently located between the House and Senate chambers (for a few hundred dollars a month).

“In 2008, taxpayers spent about $15 billion to insure 8.5 million federal workers and their dependents. By contrast, 85% of private companies offering health coverage provide their employees one type of plan -- take it or leave it.”

Not only do we need to change the faces in DC, we need to change the employment laws on the books for these folks. We need to return the legislators to their home communities to continue to serve at the fire department, a church, or a PTA. Rather than spending a full career gathering power and perks at the expense of the American electorate, they should leave Washington to earn a salary and retirement pension that doesn't gouge the taxpayer.

Read more about Congressional Retirement Benefits

Julie Ranson is a college professor, wife, and mother who lives in Virginia.

Entitlements, Recipients, & Contributors by Julie Ranson

In my last post on entitlements, I focused on the growing bloat of the welfare state in the U.S. This time, let’s talk about the recipient class and the provider class in this entitlement nation.

One of my favorite radio talk show hosts, Andrew Wilkow, speaks often about the recipient class and its members’ status as “zero-liability voters.” A zero-liability voter is a member of the recipient class who receives more money back from the government than he/she put in. We can also call the recipient a “non-contributor” or a “net consumer.” (Among other things….)

FDR's New Deal and the Earned Income Credit (EIC) are significant factors in the growth of the citizen class. The EI credit has been expanded for years 2009 and 2010. Those who earn this credit file taxes and often receive a refund over and above anything paid in. Roughly 40% of Americans pay zero or less in federal taxes. What happens if or when this recipient class exceeds 50%? Imagine the power this group will have to consistently elect those who will continue to pay them. What courageous politicians will be willing to cut entitlement programs and, essentially, commit political suicide?

On the other hand, what motivation does a recipient have to get off of welfare? Consider this scenario that repeats itself across the country and around the globe:

A lady in business for herself needed help to meet the demands of her customers. She has hired five different helpers during the past year; each has, after varying lengths of time, simply not shown up for work. The latest hire, who showed the most promise, was given a Christmas bonus and a Christmas gift, after which she never returned. Each of these employees was, in general, poorly educated and receiving, in one form or another, monthly handouts from the state or federal government. There was, therefore, little need for them to hold down a job.

This recipient class has no feeling for the provider class. Rich people can “afford” to pay more, can’t they? Isn’t this what liberals say too often? Listening to a liberal radio talk show host right after healthcare passage, I heard the host opine that “finally the rich will pay their Fair Share.” Another viewpoint decries tax cuts as welfare for the rich. “The key Republican tax proposals during the Bush administration have amounted to massive amounts of welfare for a class of Americans who don't need the help.” It’s THEIR money the government lets them keep. Hardly welfare, but such is the viewpoint of the left.

With a burgeoning federal deficit and no spending cuts in sight, the government will need to seek out more taxpayers or increase the taxes of those who are Taxed Enough Already.

Entitlement Nation: Death of a Republic

My oldest daughter is taking a college political science class. Recently, she emailed me asking for guidance on selecting a period of party dominance in America’s history. She was to write an essay about the era and why it was important. I couldn’t identify them off the top of my head, so I hit the search engine and found three major periods of party dominance. Not surprisingly, the most recent period running from the years 1932 to1968 was dominated by the Democrats. I suggested she look into that period, reminding her briefly the warped history of the “great” Depression, the FDR years, and Johnson’s Great Society. The events of those thirty-six years have paved the way to the current “Entitlement Period” which may very well lead to our destruction. (There are many with whom I won’t disagree that assert this all began with Woodrow Wilson, but I’ll just stick with the most recent 40 years of data, if our readers don’t mind.)

My daughter’s question prompted me to think about the evolution of our country into the “Entitlement Nation” that we are today. I’ve thought about it so much it’s led to this post, which is the result of much research. It’s absolutely depressing and positively frightening to think about the grave danger this extremely large part of government spending poses to our country’s social and economic health. Think about it, what does it say about our society and its future when so many are looking for a handout? There are far too many people who are asking what can their country do for them, and too few who understand and appreciate the intrinsic value of hard work and achieving success by one’s own hand while living as a contributing member of American society. The “Handout Attitude” is going to cost, and cost us dearly.

Consider this: In 1992, the combined Federal, State and Local Welfare Budget was comprised of 34 entitlement programs. According to the House Ways and Means Committee report in 2003, the list of income-tested benefit programs detailed 85 programs! As well, the same report states that expenditures for only income-tested benefits have risen from $16,116,000 in 1968 to $522,156,000 (in current dollars) in 2002. A whopping 3140% increase.

Without significant reform, the cost of Medicare, Medicaid, and Social Security will rise from 18 percent of GDP to 28 percent by 2050. That means that just these three federal government programs will be consuming between a quarter and a third of everything this country produces. Paying for those programs would necessitate raising the corporate and top income tax rates to 88 percent, the current 25 percent tax rate would rise to 63 percent for middle-income workers, and low-income workers would pay not the current 10 percent but 25 percent instead. The catastrophic impact this would have on our economy and American workers cannot be dismissed.

If that’s not enough to really bother you, consider the rest of our country’s financial mess. According to the AP in February 2010,

“The government already has made so many promises to so many expanding 'mandatory' programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained. Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project.
That doesn't leave room for much else. What's left is the entire rest of the government, including military and homeland security spending, which has been protected and nurtured by the White House and Congress, regardless of the party in power.
The U.S. debt crisis also raises the question of how long the world's leading power can remain its largest borrower.”

An editorial in a Florida newspaper wrote during last summer’s Obama Healthcare push, “Once upon a time if you wanted something you paid for it. Once upon a time it was embarrassing to ask the government for anything. That was once upon a time. I heard a new version of the reference to "Give a man a fish, he eats for the day; teach him to fish and he eats for a lifetime." Now it is, "Give a man a fish, he eats for the day; teach him to fish and he'll vote for the one who gave him the fish."

After reading these dire statistics , I was prompted to look up the phrase, “banana republic” and after wading past the entries for the trendy retailer, I found this definition: Banana republic is a pejorative term originally used to refer to a country that is politically unstable, dependent on limited agriculture (e.g. bananas), and ruled by a small, self-elected, wealthy, and corrupt clique. I am so glad that I’d already started planning my vegetable garden for the summer.... we can get a jump on the banana republic ethic about to slap us silly! Reflecting back to the start of this post, I am absolutely resolute that I, a patriotic American, am self-reliant and won’t be seeking a handout should the stuff really hit the fan. I’d also like to think that one day I can make the independent choice NOT to sign up for Medicare, but then again, maybe it will have gone the way of our liberty and national sovereignty.

Julie Ranson is a wife and mother of three. She teaches business courses at a community college in Virginia.