Posts Tagged ‘Welfare’

‘Entitlements’ and welfare: the difference

December 2, 2014

There’s a big difference, easy to not notice, between “entitlements”, such as Social Security and Medicare, and “welfare”, such as Temporary Assistance to Needy Families.

Social Security and Medicare are paid for through special earmarked funds, which the people who benefit from these programs pay into.  They are different from welfare programs, which are paid for through general tax revenues, mainly the income tax.

Gary Flamenhaft, a guest poster on the Club Orlov web log, has a good explanation of how this works.

Some people criticized my claim about the Tea Party’s reason for shutting down the government: “They thought that the welfare system is bankrupting the country.  This is a laughable claim, because welfare spending looks negligible when compared to military spending.”

They pointed to the $850 billion Social Security program, the $821 billion Medicaid and Medicare program, and the $521 billion in other mandatory programs, calling them “welfare.”

There is just one problem with this critique: none of these programs are funded using the income tax. They are called entitlements, and the way you entitle yourself to them is by paying into them using a special payroll tax. Same goes for unemployment insurance, by the way.

entitlements720All of these are funded using something that is called a tax, but in essence they are joint savings accounts that you hold in common with many other people, with some rules on how the money is then spent on those who have paid into them.

Clearly, the Tea Party doesn’t like these joint savings accounts either.  We still need to distinguish them from “welfare,” or we won’t even know what we are talking about.

If you are not aware of this, the employer and employee each pay half of the payroll tax to the government, although if you are self-employed—lucky you!—you get to pay both halves.  [snip]

If you look at the US budget, on Table S-4 p. 168, you will see the distinction between mandatory programs paid by payroll tax and “appropriated” programs paid by income tax. There may be some overlap, but this gives you a general idea:

  • Subtotal, mandatory programs: $2,234 billion.
  • Subtotal, appropriated programs: $1,174 billion.


The incentives to ignore due process of law

August 12, 2014

Matt Taibbi said he started researching his new book, The Divide: American Injustice in the Age of the Wealth Gap, in order to discover the solution to a mystery:

Why is it that, during the past 30 or so years in the United States, poverty went up, crime went down and the prison population doubled?

What his book reveals is that the rising number of arrests and jail sentences are responses not to crime, but to political and financial incentives.

The primary job of police in New York City (and no doubt other places) no longer is to respond to reports of crime.  Their job is to maximize arrests.  They have arrest quotas.

us-incarceration-and-crime-ratesThey go around looking for people to arrest.  Taibbi reported a woman going home from work who was charged with soliciting for prostitution because she allegedly makes eye contact with undercover police in a van.  He reported two young black men arrested on suspicion of being drug dealers because they were in an expensive car.

He told how police vans cruise poor, majority-black or majority-Hispanic neighborhoods, arresting people more or less at random.  Some turn out to have outstanding warrants.   Some turn out to have drugs [1] or weapons in their possession.  But many are innocent of anything that any reasonable person would regard as a crime.

Rather than admit a mistake and let them go, police often charge the others with loitering or obstructing traffic (which can consist of standing on a street corner) or failing to obey the lawful order of a police officer (which can consist of talking back or being too slow to obey).

They’re held overnight, and, if they can’t post bail—and many are too poor to post a small amount of bail—they’re kept in jail for trail.  Prosecutors ask for a guilty plea in return for a sentence limited to time served.  Which sounds like a good deal at that point, but then they have permanent criminal records.

Although there are quotas for making arrests, there are no penalties for false arrests, according to Taibbi.  Even if the City of New York is successfully sued for false arrest, the police officer who makes the arrest is not penalized, and may not even know about the lawsuit.

The more the rate of serious crime—killing, assault, rape, theft—goes down, the more effort New York police have to devote to finding reasons to arrest other reasons to arrest people.

The system of stop-and-frisk and mass arrests can only work because most people caught up in it waive their constitutional right to a fair trial.   If they ever stopped doing this, the system would grind to a halt, and police and prosecutors would have to focus on serious crime.

[Note 9/22/14.  This may be out of date so far as New York City is concerned.]

[Note 10/10/14.  Or maybe not.] 


Black people, poor people and welfare

May 21, 2012

We don’t hear much about poverty nowadays, partly because so many of us middle-aged, middle-class white people, including many of my fellow white liberals, think that poverty is mainly a result of the dysfunction of black families in the poor areas of big cities, and think that the answer is for them to listen to the sage advice of Bill Cosby about pulling yourself up by your own bootstraps.

Maybe that’s why we don’t hear much about poverty any more, only the “struggling middle class” which, of course, really is struggling.  It is all too easy to get caught up in this.  Here’s a good article that provides a reality check.  Lots of rural white people are poor, too.

Of the 46 million people living in poverty in America in 2010, the U.S. census revealed that 31 million were white. Ten million were black. Of the 49 million people without health insurance coverage, 37 million were white; 8 million were African American. Latinos of every race and Asian Americans represented the remaining largest ethnic groups.

The face of poverty in America is overwhelmingly white, but as sociologist and professor William O’Hare explains in a 2009 study on children in poverty, the white American poor, especially those in rural areas, are “forgotten.”

White Americans, poor and middle-class alike, receive the vast majority of tax-funded government assistance programs, from monthly assistance to Social Security to food stamps.

TANF  (Temporary Assistance for Needy Families), the program that provides aid to single mothers, is the most well-known welfare program, but the truth is that Social Security and Medicare are also social welfare services, funded by tax dollars. To that end, nearly 70 percent of all benefits of these programs go to white people. In fact, since African Americans have lower life expectancy, many work and pay into the Social Security and Medicare programs through their tax dollars, only to have white Americans, who have a longer life expectancy, benefit from the income they’ve left behind.

O’Hare’s research in his 2009 report “The Forgotten Fifth: Child Poverty in Rural America,” reveals that 57 percent of rural poor children were white and 44 percent of all urban poor children were white. But theirs is a story rarely told, their faces hardly seen. High poverty rates for poor and working-class whites have worsened since the 2008 economic crisis. Rural white poverty was already more systemic than urban poverty. Poor whites are more likely to lack basic education levels and remain in poverty for generations.

O’Hare found that white Americans living in rural areas benefited the least from the economic boom of the 1990s. The parents were often underemployed, and this translated into deeper poverty levels for their children.

In December 2009, the New York Times published a series of related articles showing that poor whites across Appalachia and the Mississippi Delta and through the Midwest, Deep South and Texas borderlands were the highest percentage of Americans relying on the SNAP (Supplemental Nutrition Assistance Program), or food stamp, program.

According to the New York Times, 36 million Americans relied on food stamps. More than 24 million of them were white, 8 million were African American and 6 million were Hispanic of any race.

I’m making a two-pronged argument here.   One is that poverty is not an issue of race, or rather, not just an issue of race.  African-Americans still suffer racial discrimination, which still has its apologists.  Poverty can’t be addressed on a racial basis.  It requires a high-wage, full-employment economy, such as the United States enjoyed in the 1950s and 1960s, when rates of poverty were falling, not rising.

If you have five people looking for work for every job opening, then a large number of people are going to be unemployed, no matter what.  Through your individual effort, you can increase the probability that it will be somebody else rather than yourself, but it is inevitable that somebody is going to lose out.   If you have an economy based on sorting people into winners and losers, somebody is going to be the loser.

In the current bad economy, we’re all in the same boat.  It is better to row together than to talk about who deserves to be thrown overboard.

My other argument is against the stereotype of the member of the black underclass as the representative black person.  Prejudice is to take the worst members of any group, and to attribute their sins and failures to all members of the group.  Thinking of black people in terms of poverty and social failure is a form of prejudice.

Click on Interesting Welfare Statistics for the complete article on race and welfare.

Click on Debunking the “Entitlement Society” Myth for a report from the Center on Budget and Policy Priorities on who actually benefits from the federal government’s entitlement spending.   Non-Hispanic whites, who are 64 percent of the population, receive 69 percent of the benefits.

Click on Racial discrimination continues to play a part in hiring decisions for a report on the black and white testers who proved that being black hurts your job chances worse than having a prison record.

To be clear, I think Bill Cosby’s advice is good advice for anyone, white or black.  The greater the odds against you and the more injustice and discrimination you face, the more important it is to work hard, study and better yourself.

Rainbow Rowell’s welfare essay

March 15, 2012

Rainbow Rowell is a former columnist for the Omaha World-Herald (the first woman to hold that job) and the author of two novels, Attachments and Eleanor and Park.   In 1994, as a 21-year-old journalism student at the University of Nebraska, she wrote the following for the Daily Nebraskan, the student newspaper.

Sometimes I think they can tell.  “They” meaning everyone, meaning you probably.  “They” meaning professors and friends and prospective employers.  Sometimes I think it shows in everything I do and say. In the way I walk and dress.  Sometimes I think they smell it.  Beneath my perfume, seeping out from my well-soaped skin.

Sometimes I think no matter how hard I study and smile and struggle, the poverty is still in me, rotting in my breath, devouring my stomach, burning in the back of my throat.  In my eyes.  And sometimes I think they can tell.

Rainbow Rowell today

And so I run. I excel….  Out of fear.  Fear is my motivation and drive.  My muse.  Because if I make everyone happy and pass every test, they can’t send me back.  They can’t.

But it can.  It can catch me.  It can catch me, and it can catch you.  Don’t ever think you’re too smart or too clean.  Don’t ever think you’re too hard working.

“I don’t like welfare,” someone told me yesterday.  I don’t like welfare either.  I hate it.  But I don’t know where I’d be without it…. My mother went on welfare when I was 8.  My father left us—three kids, a pregnant wife—on a farm in eastern Nebraska.  A farm with no phone.  No car.  No heat.  No electricity.  And a few weeks before they turned off the water.  No nearby family to step in.  No benevolent private sector.

We needed a safety net.  And I thank God—and this state and this nation—that there was one.  Being on welfare was hard.  Harder for my mother than for me.  The monthly check was hardly enough for a family of five….  But we were warm and safe and fed.  Above all, we were together.

Now…for the first time in my life I’m not wearing used shoes, and I own more than two pairs of jeans.  I’m two semesters away from a degree.  I have a decent shot at being middle class.  After a few years on the job, my taxes should pay back those welfare checks, food stamps and school lunches.

I’m hearing more and more about welfare.  I hear important men and women talking about trimming the fat from the budget.  About setting loose welfare queens and cheats.  About the government’s role.  About waste.  About orphanages.  Welfare, it seems, is dragging our nation down.

But Aid to Families With Dependent Children saved my family.  Welfare gave me a chance.  Most people on welfare aren’t lazy.  Aren’t dirty.  Most people on welfare are children, children neck-deep in poverty.  Children who already face more obstacles than they should.

And I don’t want them to fail.  I want them to have the same chances I had.  The same hope that maybe someday they’ll crawl out of poverty.  That if they work hard enough they can get away.  That if they study and smile and struggle, they will rise above it, beyond it.  And maybe no one will ever know.


via Blue in the Bluegrass.

Click on Rainbow Rowell for her home page.

“Did anybody help me out? No.”

July 2, 2011

Actor Craig T. Nelson, appearing on the Glenn Beck show a few months back, said he is going to stop paying taxes until the government stops bailing out failed corporations.  “I’ve been on food stamps and welfare,” he said.  “Did anybody help me out? No.”

I had to smile at Nelson’s idea of what government help is and isn’t.  But when I viewed the whole segment and listened to his full comments, I found that I sort-of halfway agreed with him.

It doesn’t make sense to continue with bailouts, subsidies and special tax breaks for big corporations, and at the same time cut back on education, fire protection and other basic services, on taking care of our veterans and, yes, on food stamps and unemployment compensation for people temporarily down on their luck as Craig T. Nelson once was.

I don’t see eye to eye with Nelson in every respect.  I think he probably gets too much of his information from Fox News. I think the Glenn Beck wing of the Republican Party is part of the problem rather than part of the answer.

But I think Nelson’s moral outrage at our current national priorities is thoroughly justified, and I even agree with Glenn Beck on recommending people read the Declaration of Independence and Tom Paine’s Common Sense.