Income Redistribution, GOP-Style

The House takes money from the poor and spends it on the rich.

When Chatterbox worked in the Washington bureau of the Wall Street Journal, he had an editor who liked to say that the United States had only two political parties: the Ins and the Outs. Fresh evidence to support this blunt maxim can be found in a computer-assisted analysis of congressional spending since 1995, conducted by David Pace of the Associated Press. Although the Republican takeover of the House of Representatives in November 1994 was widely heralded as a conservative revolution against Big Government, from 1995 to 2001, the amount of taxpayer money going to the average congressional district increased 30 percent (discounting for inflation). What changed, the AP reveals, was the party whose congressional districts received the most largesse on average. Prior to 1995, it was the Democrats. After 1995, it was the Republicans. Interestingly, the discrepancy between money lavished on Democratic and Republican congressional districts is now 15 times greater (again, discounting for inflation) than it was under the Democrats:

After six years of GOP control, the average Republican district in 2000 was getting $612 million more in federal money than the average Democratic district, the computer analysis found. In 1995, the last year Democrats controlled the budget process in the House, the average Democratic district got $35 million more.

In 1995, Democratic Rep. Henry Waxman’s Los Angeles district ranked 291st among congressional districts in terms of federal spending. Today, it’s dropped to 350th. Meanwhile, Republican Rep. Lindsay Graham’s South Carolina district, which ranked 279 th in 1995, has now climbed to 265 th. (To make your own district-by-district calculations, click here.)

How has this shift been achieved? By switching spending from programs that benefit Democratic constituencies to programs that benefit Republican ones. Thus, the AP reports,

spending on child care food programs was slashed 80 percent; public and Indian housing grants were virtually eliminated; rental housing loans for rural areas and special benefits for disabled coal miners were cut by two-thirds; and the food stamp program was cut by a third.

At the same time,

Direct payments to farmers increased sevenfold during the six years of GOP rule; business and industrial loans quadrupled; home mortgage insurance went up 150 percent; and crop insurance assistance jumped by two-thirds.

What the AP is describing, then, appears to represent not only a spending shift from Democratic congressional districts to Republican ones, but also, and more significant, a spending shift from low-income people to middle- and upper-income people. The GOP, it seems, is every bit as bent as the Democrats on redistributing income; the only difference is that while Democrats want to redistribute income downward, to the poor, Republicans want to redistribute it upward, to the rich. This impulse is particularly offensive when you consider that even before the Republicans recaptured the House, entitlement spending tended (improbable as it sounds) to favor the wealthy. Here is how Neil Howe and Phillip Longman put it in a 1992 article for the Atlantic Monthly (their source was the Congressional Budget Office):

[T]he most affluent Americans actually collect slightly more from the welfare state than do the poorest Americans. … [In 1991,] U.S. households with incomes over $100,000 received, on average, $5,690 worth of federal cash and in-kind benefits, while the corresponding figure for U.S. households with incomes under $10,000 was $5,560. Quite simply, if the federal government wanted to flatten the nation’s income distribution, it would do better to mail all its checks to random addresses. The problem is not that poverty programs don’t target the poor. More than 85 percent of the benefits from AFDC, SSI, and food stamps do indeed go to households with incomes under $20,000. But their impact is neutralized by all the other programs, which tilt the other way and are, of course, much greater in size.

The AP investigation would appear to suggest that federal spending is even more concentrated than it used to be on the rich. It’s been said more than once that President Bush is using the tax system to fatten the wallets of wealthy people. (For example, Citizens for Tax Justice recently observed  that, if fully enacted, 52 percent of the Bush tax reductions will go to people who earn, on average, $1.5 million annually.) What now needs to be noted is that the Republican-controlled House is using government spending to help those least in need. Alas, you probably won’t hear many Democrats saying this because Bill Clinton, who was president for most of that period, let it happen.