Entitlement junkies.

• Author: Longman, Phillip
• Position: Middle-class entitlements - Includes related articles

Inside a vault more than 300 feet long, scores of U.S. Treasury workers, screened by both the Secret Service and the FBI, scurry about as the clock counts down. At the loading dock outside, armed guards stand ready as a 44-foot, 18-wheel tractor-trailer slowly backs into place to receive its half-billion-dollar load. A specially trained 12-man crew quickly loads, seals, and locks the trailer. Strictly following a secret route and schedule, the rig pulls away, tailed by unmarked cars to guard against the threat of an inside job.

This is the scene late each month at the U.S. government's production plant on Townsend Road in Philadelphia. But neither bullion nor plutonium are produced here - benefit checks are. The Townsend Road facility prints and distributes Social Security checks for all who received their numbers in the northeastern United States. The roughly 600,000 checks on board each of the rigs are due in beneficiaries' mailboxes within 48 hours. Neither flat tires nor leaking brakes nor collapsing bridges along Interstate 95 will keep these semis from swiftly completing their monthly rounds. Social Security recipients expect their checks and expect them on time; it's a matter of entitlement.

Senior citizens are not alone in awaiting regular government subsidy. So, in one form or another, do farmers, veterans, homeowners, civil servants -nearly every American, in fact, is entitled today to a plethora of social benefits from government as a matter of "earned right." Indeed, our sense of entitlement has become so strong that in the last 15 years the noun "entitlement" has evolved to describe the social benefits Americans feel their government owes them. This is a quantum leap from the Great Depression, or even the sixties, when social workers had to persuade the down-and-out to accept a helping hand from government.

Republicans correctly target a culture of dependency in American society. But they deceptively imply that this culture is confined to a small segment of poor welfare recipients. In fact, dependency on government handouts touches all sectors of society, particularly the middle class. Unless Americans - led by their elected representatives - begin to wean themselves from this middle-class welfare state, Newt Gingrich's vision of individual responsibility will remain a pipe-dream. Even worse, the United States will face an economic crisis of such staggering proportions that it will absorb much of the earnings of future generations.

Gravy Train

Roughly speaking, entitlements are benefits that the government automatically distributes, without budgetary limits, to citizens eligible on the basis of their membership in some legally defined group or class. Some beneficiaries, like recipients of Social Security, disability insurance, and unemployment insurance, only collect if they have previously paid certain taxes; others, mainly veterans, qualify through service. Some, such as farmers, benefit by virtue of perceived contributions to the national interest. And a distinct minority of Americans qualify for certain means-tested entitlements simply because they are needy. Altogether, some 400 programs qualify as entitlements.

Today, slightly more than 50 percent of all U.S. households have at least one member who is receiving a direct entitlement benefit from the federal government, such as a veteran's pension or disability payment. Such families collect on average more than $10,300 a year in benefits, which adds up to a total of $750 billion, or more than half of the total federal budget.

At any given time, 30 percent of the U.S. population is also receiving indirect benefits through loopholes in the tax code. A prime example is the home mortgage deduction. Rather than subsidizing homeownership by mailing a check to everyone who borrows to buy a home, the government allows home buyers to write off mortgage interest costs on their income tax returns. The result is an entitlement that pays 27 million homeowners an average of $1,900 a year, dwarfing all other federal housing programs.

Altogether, the mortgage interest deduction and other tax subsidies to individuals cost more than $354 billion in 1993. (By comparison, tax subsidies to corporations, including all depreciation allowances, came to "only" $47 billion, according to the General Accounting Office.) The total bill for entitlements thus comes to well over $1.1 trillion each year. If all of this were going to welfare mothers, the inner cities would be full of Leona Helmsleys. In fact, poverty programs consume only one of six federal social welfare dollars; in 1990, only 25 percent of federal entitlements went to families earning $20,000 or less.

The big rigs pulling out of federal check-producing factories, like Townsend Road's, head largely for suburban, middle-class destinations where the real handout junkies live. You, dear reader, are very likely one yourself. According to recent estimates by the Congressional Budget Office (CBO), in 1990 nearly 30 percent of all veterans' benefits went to families with incomes above $50,000; so did nearly one-fourth of all unemployment benefits, about one-third of all federal civilian pensions, and more than half of all military pensions. More than 40 percent of the USDA's farm payments, meanwhile, were handed to farmers with net worths greater than $750,000.

Entitlements conveyed through the tax code are even more heavily skewed in favor of the middle class and the well-to-do. Consider, for example, the child-care credit, which cost the government more than $3 billion in 1991. Households with incomes below $10,000 received virtually no benefit from this tax subsidy. Those with incomes above $50,000, however, received $1.2 billion to help pay for nannies and other child-care expenses.

This same irony - the more you earn, the better you make out-applies to those using government help to purchase a home. According to Congress' Joint Committee on Taxation, the average value of the mortgage interest deduction for taxpayers with incomes over $100,000 was $3,469 in 1991. The same deduction was worth an average of only $516 for taxpayers in the $20,000 to $30,000...