Republicans tried this week to help their presidential candidate, Mitt Romney, rebound from the drubbing he’s received over his secretly recorded remarks about the 47% by unearthing a 14-year-old recording of then-Illinois state Sen. Barack Obama saying, “I actually believe in redistribution.”
Note to America: Not only does President Obama have a secret plan to take your guns, he’ll grab your piggy bank while he’s at it!
The mainstream media hasn’t exactly leaped on the recording, in part because we went through a very similar episode four years ago. In other words, this is a dog-bites-man story. Even if you didn’t watch the Democratic National Convention, you should know by now that Obama is a fan of the federal programs that redistribute wealth to help people in need.
For the right, though, “redistribution” is a highly charged word. It plays into the “makers vs. takers” construct that has emerged as one of the defining themes of this election. As Romney and his running mate, Rep. Paul Ryan (R-Wis.), have noted with increasing frequency, the number of Americans receiving aid from the government is growing, while the percentage paying the government’s tab is shrinking.
This theme meshes with the Romney-Ryan argument that the economy can take off again if the government pulls back and scales down, liberating “makers” to expand their businesses and put people back to work. By contrast, the GOP argues, Obama clings to a failed ideology that doling out money to people is a type of “stimulus” that will revive the moribund economy.
As Romney put it in a speech Wednesday, “I believe the way to lift people and help people have higher incomes is not to take from some and give to others but to create wealth for all.”
Yet the makers vs. takers dichotomy is misleadingly simplistic. Much of America falls into both camps. Businesses get tax subsidies, loan guarantees and contracts from federal and state governments. Most workers pay into the Social Security and Medicare systems, but there’s no way to predict which ones will get more out than they put in. Plenty of states -- mainly Southern and rural ones -- receive more in aid than their residents pay in taxes.
Redistributing wealth, meanwhile, has long been standard operating procedure for the federal government. The income tax has been “progressive” since its inception in 1913, which means high-income Americans pay a higher percentage of their earnings into the federal kitty than their less intrepid (or fortunate, your choice) neighbors. The same system can also be found in numerous states. Even if there was only one tax rate, though, the wealthy would still pay more into the system -- a flat rate of 5% collects 10 times as much from someone making $250,000 as someone making $25,000.
You might argue that this isn’t really redistribution; it’s just a way of charging the wealthy more for the government services that benefit everyone, such as national defense and food safety inspections. But a portion of the federal kitty pays for the safety net programs whose direct benefits are confined to the unemployed and the impoverished. By funding those programs, government transfers wealth from the rich to the poor.
Granted, saying “I actually believe in redistribution” conjures up the image of the government trying to produce equal outcomes -- hobbling the successful to promote the unsuccessful. There’s something vaguely Marxist about that, a “from each according to his abilities, to each according to his needs” kind of thing.
But on the recording from 1998, as well as in his controversial “spread the wealth around” remarks on the campaign trail in 2008, Obama has touted redistribution in the context of promoting opportunities, not outcomes. Here’s a telling excerpt from the 1998 recording: "[T]he trick is figuring out how do we structure government systems that pool resources and hence facilitate some redistribution, because I actually believe in redistribution, at least at a certain level, to make sure that everybody’s got a shot.”
So, how do these comments diverge from the theme of shared responsibility that Obama has been pounding away at on the campaign trail? I don’t see a difference, really. He wants high-income Americans to pay more taxes so that the government can bring the deficit under control without cutting as much from either “investments” (student loans, infrastructure, research grants) or entitlements (particularly Medicare and Medicaid).
Romney, meanwhile, wants to reduce taxes across the board and make deeper cuts in just about every non-defense program. And Ryan has proposed dramatic reductions over the long term in spending on safety net programs. But even Ryan accepts that the federal government has a role to play in steering aid to the neediest Americans. His model is time-limited aid, a la the welfare reform law Congress enacted in 1996, not no aid at all. In other words, the GOP’s opposition to redistribution is more about the degree than the concept.
Here’s a transcript of the 1998 recording, ostensibly of comments Obama made at Loyola University in Chicago. There was no telling Wednesday what Obama said before the excerpt began or after it ended; the only thing that’s clear is that he was discussing anti-poverty programs:
“Let me just close by saying, as we think about the policy research surrounding the issues I just named -- the policy research for the working poor, broadly defined -- I think that what we’re going to have to do is somehow resuscitate the notion that government action can be effective at all. There has been a systematic, I don’t think it’s too strong to call it a propaganda, campaign against the possibility of government action and its efficacy. And I think some of it has been deserved. Chicago Housing Authority has not been a model of good policymaking. And neither necessarily have been the Chicago public schools. What that means, then, is as we try to resuscitate this notion that we’re all in this thing together, leave nobody behind. We do have to be innovative in thinking how, what are the delivery systems that are actually effective and meet people where they live. And my suggestion, I guess, would be that the trick –- and this is one of the few areas where I think there are technical issues that have to be dealt with, as opposed to just political issues -- the trick is figuring out how do we structure government systems that pool resources and hence facilitate some redistribution, because I actually believe in redistribution, at least at a certain level, to make sure that everybody’s got a shot.”
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