Those Entitled Elderly, Disabled, and Working Poor

Kevin Drum points us to this Center on Budget and Policy Priorities study; Contrary to “Entitlement Society” Rhetoric, Over Nine-Tenth of Entitlement Benefits Go to Elderly, Disabled, or Working Households, that flies right in the face of the conservative narrative that our society has slowly become one big pile of lazy coach potatoes leeching off the country’s vast entitlement system:

The study reports;

Some conservative critics of federal social programs, including leading presidential candidates, are sounding an alarm that the United States is rapidly becoming an “entitlement society” in which social programs are undermining the work ethic and creating a large class of Americans who prefer to depend on government benefits rather than work.  A new CBPP analysis of budget and Census data, however, shows that more than 90 percent of the benefit dollars that entitlement and other mandatory programs[1] spend go to assist people who are elderly, seriously disabled, or members of working households — not to able-bodied, working-age Americans who choose not to work.  (See Figure 1.)  This figure has changed little in the past few years.

In 2010, 91 percent of the benefits provided through entitlement programs went to people who were elderly (65 or older), disabled (receiving Social Security disability benefits, SSI disability benefits, or Medicare on the basis of a disability — all three programs use essentially the same disability standard, which limits eligibility to people with medically certified disabilities that leave them substantially unable to work), or members of a household in which an individual worked at least 1,000 hours during the year.

The data in this analysis also dispel other common misperceptions, such as a belief (sometimes fanned by political figures) that entitlement programs shift substantial resources from the middle class to the poor.  The data show that the middle class receives approximately its proportionate share of benefits:  in 2010, the middle 60 percent of the population received 58 percent of the entitlement benefits.  (The top 20 percent of the population received 10 percent of the benefits; the bottom 20 percent received 32 percent of the benefits.

These figures contrast sharply with the distribution of the extensive deductions, credits, and other write-offs in the federal tax code, known as tax expenditures (former Federal Reserve Chair Alan Greenspan has called them “tax entitlements”).  The Urban Institute-Brookings Institution Tax Policy Center estimates that for tax year 2011, the top fifth of the population will receive 66 percent of the $1.1 trillion in individual tax-expenditure benefits (the top 1 percent alone will receive 23.9 percent of the benefits), the middle 60 percent of the population will receive a little over 31 percent of the benefits, and the bottom 20 percent of the population will receive only 2.8 percent of the benefits.

Also, contrary to what a substantial share of Americans may assume, non-Hispanic whites receive slightly more than their proportionate share of entitlement benefits.  Non-Hispanic whites accounted for 64 percent of the population in 2010 and received 69 percent of the entitlement benefits.  In contrast, Hispanics made up 16 percent of the population but received 12 percent of the benefits, less than their proportionate share — likely because they are a younger population and also because immigrants, including many legal immigrants, are ineligible for various benefits.  Non-Hispanic African Americans account for 12 percent of the population and received 14 percent of the benefits.

It would be really helpful to see more information about disability and Medicare fraud, if recording that is even possible. I wonder how much of the entitlement society belief comes from seeing able bodied workers cheat the system by simultaneously collecting disability benefits and holding down a paying job. If this was more widespread than we currently understand it to be, perhaps this accounts for some of the disconnect. I think it undoubtedly accounts for some of the story, and second hand accounts seemingly point to disability fraud as a major contributor to the disillusion. Republican Presidential and media rhetoric most likely serves only to stir up this real world problem. The impact of disability fraud is likely to be more prevalent in poor communities who also have more conservative beliefs. But the way the conservative narrative shapes the argument, the Entitlement Society is nothing more than a ghost story that diverts people’s attention from the problem that we can actually solve.

The only real way to combat the narrative as a whole is to root out the instance of fraud, which seems to have been set up in Kentucky (a state with communities like those I suggest would be ripe targets) through a Cooperative Disability Investigations Office in Lexington in 2011. The more overarching Office of the Inspector General Social Security Administration’s webpage cites;

For Fiscal Year 2011, OIG’s Cooperative Disability Investigations (CDI) efforts nationwide resulted in more than $281 million in projected savings to SSA programs, and more than $182 million in projected savings to non-SSA programs, according to recent data from OIG’s Office of Investigations.

This is an uptick from FY 2010. That is a lot of money to be uncovering due to disability fraud. I am kind of at a loss for what kind of penalty system we should pursue against the committing individuals. Clogging up our prison cells and hiring a battalion of government lawyers would be similarly wasteful. You want these people to still be able to contribute to society. An incentive program for people to out fraud would probably generate distrust among communities. Each OIG update includes a story from a local CDI office of incredible cases of fraud. They are striking in that they end with the individual being denied disability benefits, nothing else. So while there is no obvious solution to me, there is an obvious need for a crackdown. Maybe changing the plan of attack can defeat the entitlement myth.

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