Spending Disconnect

Posted Feb. 17, 2011, at 12:16 a.m.

State and federal spending need to be reduced to keep government outlays in line with revenues. Unfortunately, the debate about how best to do this is based largely on sound bites rather than reality.

That’s because the public — and many lawmakers — are woefully uninformed about government spending.

One of the most astounding misunderstandings is that most American don’t think they benefit from government programs.

“The fact is that millions of Americans benefit from government programs without realizing it,” Bruce Bartlett, a policy adviser to President Ronald Reagan wrote in a recent column for The Fiscal Times. He then cited research by Suzanne Mettler, a political scientist at Cornell University.

She found that 44 percent of Social Security recipients said they have not used a government social program. Forty percent of Medicare and GI Bill beneficiaries said they hadn’t used such programs. Sixty percent of those claiming the home mortgage interest deduction on their federal tax form and 53 percent of student loan recipients also said they haven’t used government social programs.

While these benefits may not fit with most people’s perception of government social programs, they are. The mortgage interest deduction, which depresses federal revenue by billions of dollars each year, aims to encourage home ownership, long considered a public good. Likewise, subsidized student loans enable more people to attend college.

Social Security has kept millions of seniors out of poverty, while Medicare has enabled them to get medical treatment.

All are good, but all cost money, money that a large number of Americans think the government is wasting. Of course, try to cut a program that they rely on and the outcry will be deafening.

“We could soon have a reverse Tea Party of laid-off government workers, farmers and who knows how many other people irate at losing government benefits or government services such as post offices that will probably have to be closed,” Mr. Bartlett wrote in the Feb. 11 column.

In a previous column, he reviewed the large gap between where the public thinks government money goes and where it really is spent. For example, several polls found that large numbers of American want to cut foreign aid. But, the average American thinks 27 percent of the U.S. budget goes to support other countries, according to a November poll by WorldPublicOpinion.org. In fact, less than 1 percent of U.S. spending goes to foreign aid.

The public also vastly underestimates the percentage of the budget that goes to the military.

Compounding the problem, the public thinks it pays much more in taxes than it really does. According to a CBS News-New York Times poll conducted last April, 25 percent of Americans think between 20 percent and 30 percent of their household income goes toward paying federal incomes taxes. Twenty-six percent think it is between 10 percent and 20 percent.

In reality, nearly 87 percent of Americans devote less than 10 percent of their household income to paying federal income taxes.

“I would like to believe that most people will make the right decisions given the correct information,” Mr. Bartlett wrote.

Getting them the correct information is proving increasingly difficult.

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