As the national debt soars past $35 trillion, government transfers make up an increasingly large portion of American incomes as both presidential nominees have vowed not to address the most significant drivers of this increase.
Roughly 8.2% of personal incomes in the United States came from government support in 1970, a figure that more than doubled to 17.6% in 2022, according to new research conducted by the Economic Innovation Group (EIG). EIG defined government support as payments from programs like Medicare, Medicaid, Social Security, unemployment insurance, veteran benefits, Pell Grants, food assistance and COVID-19 payments, as well as tax credits.
Reliance on government transfers is concentrated in certain regions of the country, many of which overlap with the key swing states that will determine the outcome of the 2024 presidential election. About 70% of the counties in Michigan, Georgia and North Carolina are significantly reliant on government spending.
EIG defined a county as significantly reliant on government wealth transfers if safety net and social programs accounted for 25% or more of personal income. Approximately 53% of U.S. counties fit this definition in 2022, up from just around 10% in 2000 and about 1% in 1970.
In Arizona, 86% of counties rely on the federal government for a significant portion of their income, alongside 60% of counties in Pennsylvania and 70% of those in Michigan. Across Arizona, Pennsylvania and North Carolina, roughly a third of the population resides in counties heavily dependent on federal programs for income.
Both former President Donald Trump and Vice President Kamala Harris have hesitated to announce cuts to wealth transfer programs, even with an estimated federal deficit of $1.9 trillion for the 2024 fiscal year. Harris, for her part, has pledged to extend Obamacare subsidies whereas Trump has promised to end taxes on Social Security, according to The Wall Street Journal.
Neither major candidate has pledged to reign in Social Security. The Social Security Board of Trustees projects the program’s trust fund will become insolvent in 2033.
Trump has pledged that he will not order “even a single penny’’ of cuts to Social Security or Medicare. Harris, meanwhile, has promised to “protect” and “strengthen” Social Security, but hasn’t divulged many specifics on her plan, News Nation reported.
Social Security’s increasing price tag can partially be attributed to America’s growing elderly population. Only 9.8% of Americans were 65 or older in 1970 but by 2022 17.3% of Americans were senior citizens, according to EIG.
The price of healthcare has been increasing steadily in the United States, reaching $4.5 trillion in 2022, according to the American Medical Association. The government’s total spending on Medicare and Medicaid has grown three times more rapidly than Social Security spending, with Medicare spending an average of $16,000 on each American over 65 per year, according to EIG.
Recessions are also a major driver behind the increase in government dependency as the amount of government support income received by Americans has spiked following every recession since the 1970s and remained permanently higher after the fact, according to EIG’s research.
The Trump and Harris campaigns did not immediately respond to the Daily Caller News Foundation’s requests for comment.
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