The Corner

Welfare Recipients Aren’t the Only Government Dependents

As was noted on the Corner yesterday, total means-tested welfare spending has now reached $1 trillion. That’s a 32 percent increase in the last four year.

While some of that rise is the result of the weak economy and the lack of a recovery, much of the increase at this point can traced back to expansion in eligibility for these programs. That’s certainly the case for the two largest low-income assistance programs: Medicaid ($296 billion in 2011, 40 percent of the federal total) and food stamps ($75 billion in 2011, 10 percent of the federal total).

But welfare recipients aren’t the only Americans increasingly dependent on government. Many businesses and other special interests, such as union members, count on government largesse to make ends meet, and in some cases, to prosper and grow at the expense of taxpayers.

On that point, the Wall Street Journal has a piece this morning about the 2009 government-assisted Chrysler bankruptcy and its main beneficiaries. Indiana Republican senate candidate Richard Mourdock opposed the Chrysler bailout at the time is now being hammered by the Democrats for do so.

Democratic Congressman Joe Donnelly is pounding Mr. Mourdock for opposing the 2009 government-assisted Chrysler bankruptcy. The Democrat and liberal SuperPACs like American Bridge are claiming that Mr. Mourdock wanted to “kill” the Chrysler reorganization, and had he succeeded he would have “put 100,000 Indiana jobs at risk.” Joe Biden has a word for this, and it’s earthier than malarkey.

As Mr. Mourdock can attest, the Washington-directed Chrysler bankruptcy was also about paying off Democratic constituencies at the expense of everyone else. As state Treasurer, Mr. Mourdock is the fiduciary responsible for state funds, including two pension funds (for cops and teachers) and a transportation fund that in 2009 had $42.5 million invested in Chrysler debt. The funds had even paid a premium to gain “secured” status, in order to guarantee that they would be first in line to get repaid in a bankruptcy.

As the Cato Institute’s Dan Ikenson adds, “if you want a first hand account of the strong-arm tactics, threats, and intimidation employed by the White House to get its own Chrysler bankruptcy plan rubber stamped through the process in 2009, you will want to see this video of Mourdock speaking at a Cato event. It is truthful and chilling.”

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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