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The Heritage Foundation's 'Government Dependency Index' Scam

February 8, 2012

For decades, the conservative Heritage Foundation has provided a thin academic veneer to the Republican project of dismantling the post-New Deal social safety net. Last year, for example, Rep. Paul Ryan tried to sell his draconian budget plan by citing a comically flawed Heritage analysis declaring the GOP scheme would magically reduce unemployment to an unheard of 2.8 percent by 2021. Now in the latest installment of its "Index of Dependence on Government," Heritage and its right-wing echo chamber are suggesting President Obama has escalated undeserving Americans' supposed addiction to federal largesse. That the trends long preceded his arrival in office and that his response to the greatest economic calamity since the 1930's helped prevent Great Depression 2.0 are apparently no excuse for protecting the framework of modern American society.
Intentionally designed to conflate universal programs like Social Security and Medicare with means-tested aide like food stamps, housing assistance and welfare payments, Heritage concludes that since 1962, "the Index score has grown by more than 15 times its original amount." That includes a jump of 8.1 percent in 2011. (Unsurprisingly, Heritage uses Ronald Reagan's arrival in the White House in 1980 as its baseline.) As Politico dutifully reported:

Since the 2008 index, the American people's dependence on government has grown a whopping 23 percent.
One in five Americans -- or slightly more than 67 million -- now relies on federal assistance...Overall, about 70 percent of the federal government's budget is directed to individual assistance programs. And nearly half of the population, or 49.5 percent, don't pay any federal income taxes, according to the survey.

Of course, virtually all working Americans pay the Social Security and Medicare payroll taxes, programs whose growth accounts for much of the expansion of federal domestic spending. (Also left unmentioned is that since 1965, Social Security and Medicare have helped reduce poverty among the elderly by two-thirds.) Just as important, bipartisan support for the Earned Income Tax Credit and other tax credits (for example, George W. Bush's for children) have trimmed the numbers of working Americans who owe Uncle Sam each year. As Ronald Reagan famously put it:

"[The EITC is] the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress."

Echoing the likes of Newt Gingrich and Phil Gramm who in their day branded EITC recipients "lucky duckies," Heritage paints all Americans receiving federal benefits as undeserving bordering on the parasitic:

Perhaps the greatest danger is that the swelling ranks of Americans who enjoy government services and benefits for which they pay few or no taxes will lead to a spreading sense of entitlement that is simply incompatible with self-government... Do Americans want to further accentuate class lines between those who pay for programs that advance dependence, and those who unquestioningly accept--and expect--the assistance from those programs?

Looking at the big picture, Ed Kilgore of the Washington Monthly explained Heritage's twin agenda items:

But there's an even more interesting bit of ledgerdemain going on in this report: endless hand-wringing over the socialist policies of the Obama administration nestled among data points that show increased federal spending (particularly since the Great Recession began) mainly being attributable to higher reliance on federal safety net programs that have not been significantly changed at all since 2008 (with the exception of some temporary stimulus measures aimed mainly at preventing radical reductions in Medicaid eligibility, and a boost in housing assistance--also temporary--for rather obvious reasons).

To be sure, most of President Obama's initiatives have done little to move the scale on Heritage's Index. The deep recession he inherited from George W. Bush not only helped reduce the federal government's total tax burden to its lowest level since 1950, but with its high unemployment took more Americans off the tax rolls. (Obama's "Making Work Pay" tax credit ended in 2010.) High joblessness also drove most of the increases in food stamp usage, unemployment benefits and Medicaid. (With federal stimulus funding now largely complete, the extra dollars supporting state Medicaid budgets are no longer available from Washington.)

The case of health care is particularly instructive. There's no question that increasing health care costs and fueling the growing size of the Medicare and Medicaid programs now serving tens of millions of Americans. But the rapid erosion of the traditional employer-based health care system and the accelerated cost shifting to workers is a key driver:

The deep Bush recession only accelerated the deterioration of employer-provided health care coverage. Last fall, the U.S. Census Bureau announced that the number of uninsured in America jumped to 50.7 million (16.7%) in 2009 from 46.3 million (15.4%) just the year before. But the Bush recession which began in December 2007 accounts for only a portion of that dramatic drop-off. A September 2010 analysis by the Economic Policy Institute found that employer-sponsored coverage plummeted from 68.3% of those under 65 years old in 2000 to just 58.9% in 2009. (A Thomson Reuters survey last year put the figure for 2009 at a stunning 54.6%.) It was only the expansion of government programs including SCHIP and Medicaid which offset the erosion of employer coverage over the last two years.

For the Heritage Foundation and its allies, the answer instead is a return to a mythical America that never was. Once upon a time, help with health care, unemployment, housing and old age came from "a range of community institutions, some operated by churches and social clubs." Such "local, community-based charitable organizations once provided the majority of aid, resulting in a personal relationship between those who received assistance and those who provided it." To prevent the safety net from becoming a "hammock," Heritage frets:

Americans should be concerned about this seemingly relentless upward march in Index scores. Dependence on the federal government for life's many challenges strips civil society of its historical and necessary role in providing aid and renewal through the intimate relationships of family, community, and local institutions and local governments. While the Index does not measure the decay of civil society, it reflects a declining role in this most important aspect of society.

As Ezra Klein aptly summed up a pie chart of federal spending, in the 21st century the United States government has become "an insurance conglomerate protected by a large, standing army." With its call to unravel the safety net by pretending that generations of economic, social and cultural history never happened, the Heritage Foundation wants to build a bridge to the 19th century.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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