Can an increase in government entitlements coexist with a tax break?

Question

I was watching Obama's speech today and he brought up things like guaranteed social security, health care, wellfare etc. and he also wants to decrease taxes. Call me stupid, but last time I looked at my pay check, I saw a rather large amount of money going to Social Security. So if these government entitlements are payed for by tax payers, how can we really experience a tax break? It it possible?

Answer 1

The only way that works is with a massive increase in the deficit.

Answer 2

Yes it can, as long as the increase in entitlements is offset by reductions in other government spending besides spending for entitlements.

Your social security tax is a tax that pays for an entitlement--no question about that.  And a portion of your income taxes also pays for entitlement programs.  But most of your income tax covers the cost not of entitlement programs, but of defense.  Specifically, this year the U.S. is expected to spend $515 billion on defense, but only $71 billion on health and human services.

No war in Iraq means a huge decrease in non-entitlement military spending.  Obama advocates ending the war in Iraq.  It is possible that the reductions in non-entitlement spending could pay for additional entitlements, and could also fund tax breaks.  

The error in your question is the assumption that all tax money pays for entitlement programs.  Most tax money does not fund such programs.