Oct. 28 (Bloomberg) -- Political dysfunction is often blamed for Congress’s inability to curb the U.S. budget deficit. An even bigger obstacle may be the American public.
A record 49 percent of Americans live in a household where someone receives at least one type of government benefit, according to the U.S. Census Bureau. And 63 percent of all federal spending this year will consist of checks written to individuals for which the government receives currently no services, the White House budget office estimates. That’s up from 46 percent in 1975 and 18 percent in 1940.
Those figures will climb in coming years. The 75 million baby boomers have only begun their long march into retirement, while President Barack Obama’s health-care overhaul will extend insurance coverage to more than 30 million additional people.
“The more households that are benefiting from the programs, the more difficult it is to rein in their costs,” said Bob Bixby, head of the Concord Coalition, an Arlington, Virginia- based group that promotes balanced budgets. “It’s a troubling phenomenon” and “it explains why it’s politically difficult to deal with these things.”
The increasing reliance on the federal safety net comes as a congressional supercommittee -- charged with coming up with a plan by Thanksgiving to find $1.5 trillion in savings in the U.S. budget -- faces mounting pressure to pare back spending. If the panel fails to meet its goal, $1.2 trillion in across-the-board domestic and defense spending cuts will be triggered.
It’s the Economy
Senator Jon Kyl, an Arizona Republican who sits on the 12- member supercommittee, said the swelling number of beneficiaries is “very distressing” because it means much of the population is “hooked on government” and will oppose any cuts.
The census figure showing 49 percent of Americans, or about 147 million people, live in households where someone gets a federal benefit, is from the first quarter of 2010, the most recent numbers available, according to the bureau.
A confluence of elements is helping drive up the number of beneficiaries. The biggest is the economy. With the unemployment rate stuck at about 9 percent for 30 consecutive months, demand for unemployment benefits, food stamps and Medicaid has soared.
The number of Americans receiving food stamps alone is up 72 percent over the past five years, to a record 45.3 million. Their annual cost, projected this year to reach $80 billion, tops the yearly budgets of most federal agencies.
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