Welfare spending jumps 32% in the last three years

Welfare spending as measured by obligations stood at $563 billion in fiscal year 2008, but reached $746 billion in fiscal year 2011

By Stephen Dinan

Federal welfare spending has grown by 32 percent over the past four years, fattened by President Obama's stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance, according to numbers released Thursday.

Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion, according to figures from the Congressional Research Service and the Senate Budget Committee.

That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

Sen. Jeff Sessions, the ranking Republican on the Budget Committee who requested the Congressional Research Service report, said the numbers underscore a fundamental shift in welfare, which he said has moved from being a Band-Aid and toward a more permanent crutch.

"No longer should we measure compassion by how much money the government spends but by how many people we help to rise out of poverty," the Alabama conservative said. "Welfare assistance should be seen as temporary whenever possible, and the goal must be to help more of our fellow citizens attain gainful employment and financial independence."

Welfare spending as measured by obligations stood at $563 billion in fiscal year 2008, but reached $746 billion in fiscal year 2011, a jump of 32 percent.

Complex story

The numbers tell a complex story of American taxpayers' generosity in supporting a varied social safety net, including food stamps, support for low-income AIDS patients, child care payments and direct cash going from taxpayers to the poor.

By far, the biggest item on the list is Medicaid, the federal-state health care program for the poor, which at $296 billion in federal spending made up 40 percent of all low-income assistance in 2011. That total was up $82 billion from 2008.

Beyond that, the next big program is food stamps at $75 billion in 2011, or 10 percent of welfare spending. It's nearly twice the size it was in 2008 and accounts for a staggering 20 percent of the total welfare spending increase over those four years.

Several programs to funnel cash to the poor also ranked high. Led by the earned income tax credit, supplemental security income and the additional child tax credit, direct cash aid accounts for about a fifth of all welfare.

Mr. Sessions' staff on the Senate Budget Committee calculated that states contributed another $283 billion to low-income assistance — chiefly through Medicaid.

Richard Kogan, senior fellow at the liberal-leaning Center on Budget and Policy Priorities, said that while the dollar amounts for low-income assistance are growing, they still represent about the same slice of the budget pie when viewed over the long run. He said the costs may have spiked during the recession, but are projected to drop back to more normal levels once the economy recovers.

"In short, whatever one thinks about the merits or costs of these programs, other than Medicaid, they are contributing nothing to long-run budgetary pressures," he said.

As for Medicaid, where major spending increases have been made, Mr. Kogan said even there it may be a savings.

"Medicaid provides health care at a noticeably cheaper price than Medicare does, and both are cheaper than the cost of private-sector health insurance," he said. "The problem is not that the programs are badly designed — it is that the entire health care system in the U.S. is much more expensive than in any other advanced country."

Combined with several programs also directed at health care, the category made up 46 percent of total welfare spending in 2011.

Mr. Kogan said the cash assistance figure was "a shockingly small amount of money" in the scheme of things.

"Virtually all the rest is in the form of in-kind assistance: Medicaid, SNAP, WIC, housing vouchers, Pell Grants, LIHEAP and child care vouchers; or in the form of direct services, such as community health centers, Title 1 education, foster care, school lunch and Head Start," he said.

Rather than straight transfers, those other programs provide support for services Congress has deemed worthy of funding. SNAP is the Supplemental Nutrition Assistance Program that used to be called food stamps; LIHEAP is the Low Income Home Energy Assistance Program; WIC is the Women, Infants and Children nutrition program; and Pell Grants provide assistance for college costs.

The conservative Heritage Foundation said roughly 100 million Americans get benefits from at least one low-income assistance program each month, with the average benefit coming to around $9,000.

The think tank estimates that if welfare spending were transferred as straight cash instead, it would be five times more than needed to lift every American family above the poverty line — though many of the programs help those above the poverty line.

Mr. Sessions' Budget Committee staff said that at current projections, the 10 biggest welfare programs will cost $8.3 trillion over the next decade.

The Congressional Research Service looked at obligations for each program as its measure of spending. It included every program that had eligibility requirements that seemed designed chiefly to benefit those with lower or limited incomes. The report looked at programs that had obligations of at least $100 million in a fiscal year, which meant some small-dollar welfare assistance wasn't included.

Political wrangle

The report was released as President Obama and Republican presidential nominee Mitt Romney fight over the size and scope of government assistance.

Mr. Obama has taken heat from Republicans for a new policy that Republicans argue would remove work requirements from the 1996 welfare reform. The administration said it is merely adding more flexibility for states, which still would have to prove the law is meeting its jobs goals.

Mr. Romney was damaged last month by caught-on-camera remarks in which he said 47 percent of Americans are dependent on government and see themselves as victims.

In Tuesday's debate, Mr. Romney blasted Mr. Obama for overseeing a 50 percent increase in the number of people on food stamps, which has risen from 32 million to 47 million.

But the two men also share some agreement on safety-net programs. In the debate, Mr. Romney said he wants to increase the Pell Grant program to help low-income students pay for college.