Romney Comments at Fundraiser on Taxes and Entitlements Draw Fire, Fuel Debate

From The Wall Street Journal:

A video of Mitt Romney at a private fundraiser, where he characterized nearly half the population as beholden to the government, sparked a political firestorm Tuesday and also a vigorous policy debate about taxes and entitlements.

Some 49% of the population lived in a household that received some type of government benefit in mid-2011, according to census data, up from 30% in the 1980s. Roughly one in seven households receives food stamps, a number that has risen sharply alongside the bad economy.

But the mix of benefits that touch nearly half the population varies more widely than Mr. Romney suggested. For example, 16.2% of Americans received Social Security benefits and 14.9% were covered by Medicare. Most people receiving these benefits have paid taxes to fund the programs for decades.

"The bulk of entitlement benefits go to people who earned them by working," said Robert Greenstein, founder and president of the left-leaning Center on Budget and Policy Priorities, making a point that liberal critics have used to challenge Mr. Romney's characterization of the federal safety net.

It is also true that roughly 47% of Americans didn't pay federal income tax in 2010, according to the latest data from the congressional Joint Committee on Taxation. That is largely because of targeted tax breaks such as assistance for the working poor and deductions for children in moderate-income families.

In 1992, 27% of households didn't pay federal income tax, according to the JCT. Many of those people do pay payroll taxes as well as state and local levies.

The growth in entitlement spending rankles conservatives who say the programs are growing out of control. They also argue that a declining percentage of people paying federal income taxes carries a danger of dividing the country into "makers" and "takers," where the latter have no skin in the game when it comes to federal budget policies.