Robert Samuelson November 19, 2013

How often have you heard that we have the best government money canbuy? Washington is overrun, it’s said, with fat-cat lobbyists whoselavish campaign contributions and insider connections manipulate theWhite House and Congress to serve big corporations and the rich.Meanwhile, the poor and middle class are ignored. This damning anddemoralizing indictment has only one major defect: It’s about 98 percent untrue.

What we actually have is government that’s beholden to the poor and middle class. It redistributes from the young, well-off and wealthy tothe old, needy and unlucky. To be sure, Washington is awash with lobbyists who do secure tax breaks, congressional preferences and regulatory advantagesfor wealthy clients. But these triumphs — often cited to prove thesystem’s “unfairness” — are small potatoes in the larger scheme ofthings.

This is no secret. But now a report from the Congressional Budget Office (CBO) makes the point with a deluge of data.

The report — called “The Distribution of Federal Spending and Taxes in 2006” — shows where government’s money comes from and where it goes. The CBOdivides the population into elderly (65 and over) and non-elderlyhouseholds. They’re respectively 15 percent and 85 percent of thepopulation. The non-elderly are also examined by income, from thepoorest to the richest fifth. Here’s what the CBO found (The year 2006was the latest for which detailed data were available):

● Slightly more than half (53 percent) of non-interest federal spendingrepresented individual benefits and health care. Of these transfers(nearly $1.3 trillion), almost 60 percent went to the elderly. SocialSecurity and Medicare dominated overall spending. Other benefitsincluded Medicaid, unemployment insurance, food stamps, Pell grants,veterans’ benefits, subsidized school meals and housing assistance.

● Of the non-elderly’s $550 billion in benefits and health care, thepoorest fifth of households received half. The next two poorest fifthstook roughly another 30 percent. Thus, most benefits went to people inthe lower half of the income distribution. Payments to the upper middleclass often reflected Social Security begun before 65 and/or earlyMedicare eligibility.

● The non-elderly paid almost 85 percent oftaxes, with the richest fifth covering two-thirds of that. If government taxes and transfers — what people pay and get — are lumped together,the average elderly household received a net payment of $13,900 in 2006; the poorest fifth of non-elderly households received $12,600. Bycontrast, the net tax payment for the richest fifth of non-elderlyhouseholds averaged $66,000.

● Growing transfers have shrunktraditional government functions, from defense to transportation toparks. They’re only 40 percent of 2006 spending.

If lobbyists aimto empower the rich, they’re doing a lousy job. Democracy responds moreto the mass of voters and to political crusades than to the wealthy orbusiness interests. In the recent government shutdown, corporate America discovered that its influence on congressional Republicans was modestor nonexistent. It’s not that big companies and wealthy individuals arepowerless, but their power is vastly exaggerated.

The idea thatgovernment is routinely bought and sold by the rich is a source ofwidespread — but misleading — cynicism. It’s the false premise on whichso-called campaign finance “reform” rests. Moneyed interests areallegedly so corrupt that they must be controlled or else they will ruin democracy. The resulting campaign rules have, by inspiring evasions and compromising free speech, fed the cynicism they were supposed tosuppress. They have made politics more costly and cumbersome withoutmaking it more effective.

Democracy’s problem is not theinfluence of money. It’s the influence of people. As the CBO reportshows, so many Americans have become dependent on government thatconsensual change is difficult and, perhaps, impossible.

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