What's the biggest single job the federal gov't undertakes? Cut checks.

What Does Government Do?

John Merline
AOL News
Feb 19, 2011

Pop quiz. What's the biggest single job the federal government undertakes?

National defense? Nope.

Homeland security? Wrong.

Transportation? Not even close.

Law enforcement? No way.

Education? Getting colder.

Foreign aid? Are you kidding?

Nope, the biggest single thing the federal government does these days is ... cut checks.

Lots and lots and lots and lots of checks that go to individual citizens -- $2.3 trillion worth last year alone.

In fact, according to a table buried deep inside the little-noticed Historical Tables volume of the White House's 2012 budget, these "direct payments to individuals" accounted for more than two-thirds of federal spending in 2010. That's a post-war high.


Source: Office of Management and Budget, FY 2012 Budget

And that share has been steadily climbing. Payments to individuals accounted for 2.4 percent of all federal spending in 1945. By 1980 it has risen to 47 percent, and in 1992 it crossed the 50 percent mark. (See first chart.)

Where does all this money go? More than half goes to seniors through Social Security and doctors and hospitals providing Medicare benefits. Only about 38 percent goes to the poor. And the rest of the payments end up with farmers, students, the unemployed, those looking for retraining help, veterans and other select groups.

And the biggest of these direct payment programs -- Social Security, Medicare and Medicaid -- are also the fastest growing in the federal budget.


Source: The Tax Foundation, based on IRS data

At the same time, the federal government increasingly relies on fewer and fewer taxpayers to cover its costs.

In fact, according to the IRS, which collects such data, the share of income taxes paid by the richest 1 percent almost equals the share of income taxes paid by the bottom 95 percent. Today, roughly a third of those who file a tax return don't pay any federal income tax at all, or get more in refundable tax credits than they pay in taxes. (In 1985, only 18 percent fell into this camp, according to the Tax Foundation.)

When you put these two trends together, what you find is that the federal government has over the years essentially turned into a gigantic wealth-transfer machine -- taking money from a shrinking pool of taxpayers and giving it out to a growing list of favored groups.

Now, depending on your political perspective, you could view this is a good thing or a bad thing.

But whatever your view, this situation will make getting the federal budget under control increasingly difficult, since it will invariably involve pitting those writing checks against those cashing them.

But whatever your view, this situation will make getting the federal budget under control increasingly difficult, since it will invariably involve pitting those writing checks against those cashing them.

Basically, it comes down to taxpayers standing up to the fed and against those who take not paying taxes for granted. The numbers cited in this article is totally unsustainable.

I fail to see the bad part about people getting aid from the government. EVERYBODY benefits from the taxes they paid.

I agree to an extent. Government should help people enough to keep their head above water, nothing more. But too many people have made a career out of claiming benefits. That needs to stop.

I also disagree with the idea that private charity alone should help the needy. When we tried that we ended up with workhouses.

Private charities will never be able to take care of the people as the government can, they simply don't have the resources.

I agree with people making a career out of claiming govt benefits, but that can't be prevented. If the govt were to check up on everybody to see if they're using their benefits like they're supposed to, it would cost more than just paying for it.

Obviously this is the debate that is happening now in Wisconsin (and now Ohio too). And while I agree that there is "merit" to the debate (i.e. states are broke and (maybe) looking for ways to save money), I think that in those particular states, there is also something else going on (i.e. an effort to break the unions). If that actually happens (which I doubt it will), who would foot the bill??? The federal government. In the end, they would have to shell out even more than they already do now because "private charities" wouldn't stand a chance. Let's face it (and this is my problem with the "right"), there are people out there who have a legitimate need for help. But yet, they don't seem to matter... In the end, IMO, it's about the "haves" and the "have-nots". And IMO, since (some of) the "haves" don't seem willing to do their part, it's up to the "have nots" (which includes unions) to force them to.

BubbleBliss wrote:
I fail to see the bad part about people getting aid from the government. EVERYBODY benefits from the taxes they paid.

It's 2/3 of all federal spending, Bubbles. Something is going to give and it's not going to be the taxpayer. This country is on the road to fiscal ruin from decades of this entitlement culture. The govt is paying out more to people in entitlement than it's taking in. With the federal debt beyond breaking point, there's no tax increase that's going to fix it. Cuts are going to have to be made. We have no EU to bail us out.

i_luv_miley wrote:Obviously this is the debate that is happening now in Wisconsin (and now Ohio too). And while I agree that there is "merit" to the debate (i.e. states are broke and (maybe) looking for ways to save money), I think that in those particular states, there is also something else going on (i.e. an effort to break the unions). If that actually happens (which I doubt it will), who would foot the bill??? The federal government. In the end, they would have to shell out even more than they already do now because "private charities" wouldn't stand a chance. Let's face it (and this is my problem with the "right"), there are people out there who have a legitimate need for help. But yet, they don't seem to matter... In the end, IMO, it's about the "haves" and the "have-nots". And IMO, since (some of) the "haves" don't seem willing to do their part, it's up to the "have nots" (which includes unions) to force them to.

A real quick response and I have to go eat.

On breaking unions:

Federal workers that are unionized are forbidden to collectively bargain for wages or benefits. Instead, pay increases are determined annually through legislation. So, why shouldn't state employees be held to the same standard? We are talking state employee unions, not private sector unions. The Wisconsin governor has said nothing about those and he has no say in private sector unions. Also, private sector unions are organized against the "might and greed" of ownership. Public employees unions are organized against the might and greed of what? The public? The govt? State govt's already have civil service laws that have to be adhered by!

Gov't collective bargaining means voters don't have the final say on public policy. Instead, their elected representatives must negotiate spending and policy decisions with unions. That's not exactly democratic.

TexasBlue wrote:Public employees unions are organized against the might and greed of what? The public? The govt? State govt's already have civil service laws that have to be adhered by!

Unions are organized against the possibility of unfair practices of the very businesses that the people work for. Without unions, the businesses not only make the rules, they can change them whenever they like. Unions make sure that the people (that work for those business) have a say in what happens.

TexasBlue wrote:Gov't collective bargaining means voters don't have the final say on public policy. Instead, their elected representatives must negotiate spending and policy decisions with unions. That's not exactly democratic.

Neither is slave labor, which without unions, could very easily exist. And remember, it wasn't so long ago that it actually did exist.

i_luv_miley wrote:

TexasBlue wrote:Public employees unions are organized against the might and greed of what? The public? The govt? State govt's already have civil service laws that have to be adhered by!

Unions are organized against the possibility of unfair practices of the very businesses that the people work for. Without unions, the businesses not only make the rules, they can change them whenever they like. Unions make sure that the people (that work for those business) have a say in what happens.

Again, you missed the part about civil service rules in each state.

i_luv_miley wrote:

TexasBlue wrote:Gov't collective bargaining means voters don't have the final say on public policy. Instead, their elected representatives must negotiate spending and policy decisions with unions. That's not exactly democratic.

Neither is slave labor, which without unions, could very easily exist. And remember, it wasn't so long ago that it actually did exist.

There are federal laws on "slave" labor. So, that point is null and void.

We're talking govt unions here, not private sector. You seriously need to separate the two. The Wis. guv isn't even blathering about private sector unions. As it is, he can't do anything about them to start with.

Just a side note though. If Wis. lawmakers don't pass the bill then 1,500 state workers could be laid off by July with another 6,000 forced out of work over the next two years. This, according to the governor. So, they either start paying into their pension plan (which they don't anything at this point) and they start paying a bit more for their health care. They pay only 6% right now and under the new bill they will pay 12%. all this or they'll be losing their jobs.