Welfare: The Elephant in the Room

Jun 16, 2012 by

by Henry W. Burke

6.15.12

INTRODUCTION

Which federal program is larger than any other program except Social Security?  Which federal program is growing faster than any other program?  If you answered Defense or Medicare, you would be making good guesses.  The answer is Welfare.

Because the welfare program is so large yet receives very little media attention, it is the proverbial “elephant in the room.”

How large is this welfare elephant?  Government programs for poor and lower-income people are costing taxpayers hundreds of billions of dollars each year.

The only federal program larger than Welfare is Social Security; welfare spending is larger than Defense and Medicare.

Our country has spent huge sums of money on welfare over the years.  Since the War on Poverty began in the 1960s, the government has spent $19.8 trillion to fund a growing list of welfare programs.  Robert Rector, Senior Fellow at The Heritage Foundation, deduced:

            This is nearly three times the cost of all military wars in U.S history from the Revolutionary War through the current war in Afghanistan.

http://budget.house.gov/UploadedFiles/rectortestimony04172012.pdf

Means-tested welfare programs include those benefits that are provided only to poor and lower-income persons (e.g., food stamps, public housing, Medicaid, and Temporary Assistance to Needy Families).

By contrast, non-welfare programs provide benefits and services for the general population at all income levels. These programs include Social Security, Medicare, police protection, and public education.

A.  Scope of Welfare Programs

1.  Overall Scope

The governmental safety net has three basic components: (1) Social Security and Medicare for the elderly; (2) unemployment insurance and worker’s compensation; and (3) anti-poverty or means-tested welfare programs.  The means-tested welfare system consists of 79 federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low income Americans.

http://budget.house.gov/UploadedFiles/rectortestimony04172012.pdf

2.  Food Stamps

Two of the largest federal welfare programs today are food stamps and public housing assistance. The Food Stamp program (Supplemental Nutrition Assistance Program or SNAP) is the federal government’s largest food assistance program. It is a quasi-entitlement that pays states for nearly every person who enrolls in the program.

Although nearly all food stamp households contain working-age adults, few of these individuals are employed. The food stamp program fosters a pattern of long-term dependence.  About half of the aid goes to individuals who have received aid for 8.5 years or moreAlmost 41 % of the food stamp recipients have been on food stamps for 10 years or more! 

http://www.heritage.org/research/reports/2010/06/confronting-the-unsustainable-growth-of-welfare-entitlements-principles-of-reform-and-the-next-steps

3.  Housing Assistance

The U.S. Department of Housing and Urban Development (HUD) runs three primary housing programs that provide assistance to low-income citizens.  These programs subsidize the rent of about 4 million low-income households annually.  With no time limits or work requirements, recipients have no incentive to find employment or leave the rolls.

B.  Growth of Welfare Spending

Total means-tested welfare spending (federal and state) has been doubling each decade, going from $0.47 trillion in the 1969-1978 decade to a projected figure of $10.3 trillion in the 2009-2018 decade (about 20 times greater).

http://www.heritage.org/research/reports/2010/06/confronting-the-unsustainable-growth-of-welfare-entitlements-principles-of-reform-and-the-next-steps

Welfare spending has been the fastest-growing part of government spending for the past two decades.  For the Fiscal Year 1989 to FY 2008 time period, the percentage increase in annual spending has been: 292 % for Welfare, 213 % for Social Security & Medicare, 143 % for Education, and  126 % for Defense.

C.  Welfare Increases Under Obama

Welfare spending has really taken off under Obama.  Here is the zinger: During Obama’s three years in office, he has increased welfare spending three times faster than prior welfare increases.

Supporters of Obama’s increase in welfare spending might suggest that these spending increases are merely the result of the current recession.  That is not the case; most of Obama’s increases are permanent expansions of the welfare state.  This is borne out by the long-term spending plans set forth in Obama’s 2013 Budget.

Federal spending on welfare has steadily mushroomed under Obama.  By Fiscal Year 2011, federal and state spending had grown to $927 billion.

[$717 billion federal spending plus $210 billion state spending = $927 billion total spending]

The only federal program larger than Welfare (at $717 billion) is Social Security (at $731 billion).  Actual 2011 expenditures (outlays by budget function) show that Welfare spending is larger than Defense (at $705 billion) and Medicare (at $486 billion).

http://www.cbo.gov/sites/default/files/cbofiles/attachments/Supplemental_byFunction.xls

Under Obama, food stamp spending has more than doubled, going from $39 billion in 2008 to $81 billion in 2012.

The number of people on food stamps has grown from 31 million in 2008 to 46.4 million in 2012 (a 50 % increase).

http://www.fns.usda.gov/pd/29SNAPcurrPP.htm?utm_medium=email&utm_source=et&utm_content=http%3a%2f%2fwww.fns.usda.gov%2fpd%2f29SNAPcurrPP.htm&utm_campaign=1285511_237415_RNC%20Research

The 46.4 million people on food stamps equate to about 1 in 5 U.S. residents!

[243 million / 46.4 million = 5.24]

http://www.bls.gov/news.release/empsit.a.htm

That is why Obama is called “The Food Stamp President!”

D.  Why Is the Elephant Not Recognized?

Why is the extent and magnitude of the welfare program not understood?

In testimony before Paul Ryan’s House Budget Committee (on 4.17.12), Robert Rector pointed out that typical discussion of government spending assumes that the federal budget consists of four principal parts: (1) entitlements (meaning Social Security and Medicare); (2) defense; (3) non-defense discretionary spending; and (4) interest.

This perspective is misleading because it ignores the hidden welfare state: a massive complex of 79 federal means-tested anti-poverty programs.  Rector explained:

          The public is almost totally unaware of the size and scope of government spending on the poor. This is because Congress and the mainstream media always discuss welfare in a fragmented, piecemeal basis. Each of the 79 programs is debated in isolation as if it were the only program affecting the poor. This piecemeal approach to welfare spending perpetuates the myth that spending on the poor is meager and grows little, if at all.

The piecemeal, fragmented character of the welfare system hides its true scope and magnitude.

http://budget.house.gov/UploadedFiles/rectortestimony04172012.pdf

Rector is saying that Congress does not view welfare spending in its entirety.  When Congress looks only at a program here or a program there, this perpetuates the myth that welfare is relatively small.  Congress must focus on the overall scope of welfare to understand its immense size and curb rapidly expanding welfare costs.

E.  The Welfare State

Why is welfare out of control with rapidly rising costs?  The welfare system is broken and needs major repair.

Because no time limits or work requirements are associated with any of these programs, recipients have no incentive or urgency to find employment or leave the rolls.  Able-bodied welfare recipients should be required to work or to prepare for work (for a minimum of 30 hours per week) as a condition of receiving aid.  We need to promote personal responsibility and work.

Welfare to able-bodied adults creates a potential moral hazard because providing assistance to those in need can lead to an increase in the behaviors that generate the need for aid in the first place. If welfare assistance rewards behaviors that lead to future dependence, costs can spiral out of control.  We need to provide a portion of welfare assistance as loans rather than as grants.

The decline of marriage is a predominant cause of child poverty in the U.S.

Roughly two-thirds of poor children reside in single-parent homes. Children born to and raised by a single parent are 7 times more likely to live in poverty than children born to and raised by a married couple.

If poor women who have children out of wedlock were married to the actual fathers of their children, nearly two-thirds would immediately be lifted out of poverty.

When the War on Poverty began in the 1960s, 7 % of children in the U.S. were born out of wedlock; today, the figure is over 40 %.  For African-Americans, the out-of-wedlock birthrate is 72 % !  Children raised in single, never-married homes do not do very well.  We need to end the welfare marriage penalty and encourage marriage in low-income communities.

Around 15 % ($100 billion per year) of total means-tested welfare spending goes to households headed by immigrants with high school degrees or less. One-third of all immigrants lack a high school degree.  Government policy should limit future immigration to those who will be net fiscal contributors (paying more in taxes than they receive in benefits).  We need to limit low-skill immigration.

It is time to apply some of the lessons learned from the 1996 welfare reform legislation.  That is why Rep. Jim Jordan (R – Ohio) advocates linking food stamps to work; those receiving food stamps should either have a job or be actively seeking one.  Rep. Jordan said  “The aim of welfare should be to help people reach the point where they no longer need it.

Careful policy reforms focused on fiscal restraint, strong work requirements, the promotion of marriage, and personal responsibility can transform the federal welfare system.  This will reduce dependence on government and increase the well-being of families and children.

CONCLUSION

Robert Rector of The Heritage Foundation  has deduced that the amount spent on welfare ($19.8 Trillion) since the 1960s is 3 times more than the cost of all U. S. military wars from the Revolutionary War through the current war in Afghanistan.
Means-tested welfare programs consist of 79 federal programs (e.g., food stamps, public housing, Medicaid, Temporary Assistance to Needy Families) and provide cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.

The food stamp program (one of the two largest welfare programs) creates no incentive for people to become independent.  Almost 41% of the recipients have been on the program for 10 or more years.

Total means-tested welfare spending has been doubling every 10 years since 1969; but during Obama’s three years in office, welfare spending has grown three times faster — from $39 billion in 2008 to $81 billion in 2012, with the number of recipients increasing during that same time period from 31 million to 46.4 million. That is why Obama is called “The Food Stamp President!”

Bio for Henry W. Burke 

Henry Burke is a Civil Engineer  with a B.S.C.E. and M.S.C.E.  He has been a Registered Professional Engineer (P.E.) for 37 years and has worked as a Civil Engineer in construction for over 40 years.

Mr. Burke had a successful 27-year career with a large construction contractor. 

Henry Burke serves as a full-time volunteer to oversee various construction projects. He has written numerous articles on education, engineering, construction, politics, taxes, and the economy. 

Henry W. Burke E-mail:  hwburke@cox.net

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