Network News

X My Profile
View More Activity

Research Desk tallies: How expensive is welfare?

By Dylan Matthews

bmkhawk asks:

What percentage of the annual budget is due to welfare programs?

When people refer to "welfare," they usually mean the Temporary Assistance to Needy Families program (TANF), which provides funds to families with children while encouraging parents to find employment so they do not need the assistance long-term. TANF replaced Aid to Families with Dependent Children, a New Deal program that also helped poor families but had fewer work requirements. AFDC was abolished and TANF established in 1996, under Bill Clinton's welfare reform effort.

TANF is a federal-state joint program, with the federal government providing a block grant and states spending "Maintenance of Effort" (MOE) funds, which have to amount to a set percentage of what states paid for AFDC before its abolition. The most recent data are from fiscal 2008, when the federal government spent $20.5 billion, and federal and state governments combined spent $31 billion. As a percentage of the $2.9 trillion (PDF) in federal spending in fiscal 2008, this is minuscule. Federal TANF spending made up a mere 0.7 percent of the budget.

TANF has a federal lifetime limit of 60 months (five years); states can opt to extend that, but most have kept it, and some have shortened it. However, most recipients do not fall off the rolls because they hit the limit; in fact, only 2.4 percent of those who left the program in fiscal 2008 did so because they hit a state or federal time limit.

Far more common were departures due to finding employment (19.6 percent), a failure to cooperate with requirements of the program (15 percent) or a voluntary desire to leave (13.2 percent). And while those on the program do not generally rely on it for its full duration, fewer and fewer eligible families are relying on it at all. As this Center for Budget and Policy Priorities graph shows, the number of eligible families receiving TANF or AFDC assistance has plummeted since welfare reform:

percent_participating_graph.jpg

By Dylan Matthews  |  August 9, 2010; 11:17 AM ET
 
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Tony Judt
Next: The comfort of individual preferences

Comments

Just look at the post 1994 declines! Now if ever there was an argument that what Obama needs is a Republican congress, that graph is it.

Posted by: bgmma50 | August 9, 2010 11:45 AM | Report abuse

"As a percentage of the $2.9 trillion (PDF) in federal spending in fiscal 2008, this is minuscule. Federal TANF spending made up a mere 0.7 percent of the budget."

This an unimportant misdirect. Almost everything looks small compared to the Federal Budget. The few things that don't are so large, it's almost impossible to speak of them as single entities without immediately talking about their constituent parts.

America needs to prioritize her spending, and that means justifying each dollar spent. Far more important statistics for judging that might be comparing outcomes in states with stronger than TANF welfare programs to state with the smallest TANF programs.

Not all spending is bad spending, but comparisons of programs cost to the size of the budget is a rhetorical trick that helps no one. It's also how you can bust your personal budget on starbucks. Each latte's only ~3 bucks.

Posted by: saj29 | August 9, 2010 11:56 AM | Report abuse

* It's also how you can bust your personal budget on starbucks. Each latte's only ~3 bucks.*

But you'd save a ton more money by spending less money on rent and driving a cheaper car, rather than worrying about $5/lb coffee vs $4/lb coffee. It's like how people get worked up about "foreign aid" being a drain on the budget.

Posted by: constans | August 9, 2010 12:11 PM | Report abuse

Off-topic: Here is a video of Sarah Palin's idea of defending the constitution by having one of her handlers tear down a sign criticizing her decision to quit as Governor put up by a teacher and Alaskan resident. She also mocks the woman for being a teacher as her daughter (Bristol?) calls the Woman an "A-hole"
http://www.huffingtonpost.com/shannyn-moore/sarah-palins-homer-moment_b_675198.html#comments

Posted by: JRM2 | August 9, 2010 12:21 PM | Report abuse

@saj29:

When the question is "what percent of the budget is welfare programs" it's hard to say that comparing welfare programs to the budget is a misleading perspective.


Worth adding that the question said "programs", plural, and I don't think Medicaid is included in TANF. How much does Medicaid cost? Aren't there other programs that could be classified as welfare as well?

Posted by: eggnogfool | August 9, 2010 12:42 PM | Report abuse

The fact that the word 'Medicaid' does not appear anywhere here makes this post and those numbers utterly worthless.

Posted by: krazen1211 | August 9, 2010 12:51 PM | Report abuse

Okay, I got some numbers.

TANF is 18 billion per year.

Housing vouchers/public housing comes to 36 billion per year.

The food stamp program comes to 73 billion per year.

Medicaid comes to 275 billion per year.

If you want to go into full Heritage Society mode, SSI + EITC + SCHIP + WIC + other relevant programs adds up to an extra $150 billion or so.

It should be noted that a lot of this is spent matching state money some way or another, so the true 'burden' of these programs to the average american is significantly more than the nominal $550 billion in federal money.

Posted by: eggnogfool | August 9, 2010 12:53 PM | Report abuse

"Worth adding that the question said "programs", plural, and I don't think Medicaid is included in TANF. How much does Medicaid cost? Aren't there other programs that could be classified as welfare as well?"

This looks right. Pretty much every means tested income or in-kind transfer should be considered welfare for this exercise. That would include Medicaid, SCHIP, SNAP, perhaps even the EITC, and exclude social insurance programs such as OADSI, UI and Medicare.

Posted by: justin84 | August 9, 2010 12:54 PM | Report abuse

Yes, but what about SSI -- "supplemental security income", reported in the federal budget (http://www.gpoaccess.gov/usbudget/fy11/pdf/budget/social.pdf) with actual expenses in 2009 of $44,906,000,000.

When I think of "welfare", SSI is what pops into my mind: TANF and Medicaid are under HHS, whereas SSI is the portion of the Social Security Administration which deals with indigents.

That $44,906,000,000 overlooked by Matthews is nothing to sneeze at.

Posted by: rmgregory | August 9, 2010 12:54 PM | Report abuse

It would be interesting to plot the numbers dropped from welfare since the Clinton reforms, versus the growth of citizens in US prisons.

In addition, the stated cost of the programs is almost certainly split between the value of services and currency recipients receive, versus the money spent on administrators, buildings, bonuses and salaries, and other professionals who are hired or contracted to keep an eye on the poor folks.

Noni

Posted by: NoniMausa | August 9, 2010 12:59 PM | Report abuse

"Welfare" means any program that benefits people other than me.

Posted by: steveh46 | August 9, 2010 1:06 PM | Report abuse

yes, it is interesting that Mr Klein neglected several other very expensive programs. Others here have provided a decent list.

This is just another lie from a liberal. Who is shocked by that?

When the discussion gets to mortgage forgiveness from Fannie and Freddie the government will have developed yet another transfer payment scheme. The current schemes are limited to the process of taking money from productive people and giving it to non productive people. The mortgage scam will be a whole new dimension: taking money from responsible people and giving it to irresponsible people. Wow, how cool with that be for those of us who scrape up our mortgage payment every month! We stay current, so those that didn't can catch a gift.

My prediction is that some liberal here will call me a racist for having the nerve to criticize Mr Klein. When lying doesn't work, move to plan B: smearing.

yeah, sure.

Posted by: skipsailing28 | August 9, 2010 1:10 PM | Report abuse

@skipsailing:

(1) Klein didn't write this post. Please try reading.

(2) 'Liberals' have already pointed out the inaccuracy of the limited view given, a far cry from defending the author (again, not Klein) from all criticism.

(3) The mortgage forgiveness thing isn't going to happen.

(4) Mortgage forgiveness, in this context, doesn't cost anyone anything.

(5) 'Racist' isn't the adjective I would apply to you based on that post.

Posted by: eggnogfool | August 9, 2010 1:30 PM | Report abuse

Between the years of 1961 and 1965, numerous welfare programs metastasized as part of the cancern known as Johnson's War on Poverty (not to be confused with Johnson's War on Vietnam, which was equally successful). A smattering of welfare acts passed during the period are summarized in a document available online at http://www.archive.org/details/majorfederallegi00unit . It's important to read the Acts rather than simply noting titles: many Acts have tiles which suggest one purpose and text which serves another. For example, when we hear "disabled," we might not think "aid to non-taxpaying drug-addicted non-citizen aliens."

To tally the cost of welfare, it seems reasonable to include, at a minimum, the cost of all programs (and their progeny) which were originally called "Welfare" by a President and Congress.

Posted by: rmgregory | August 9, 2010 1:36 PM | Report abuse

Thanks for the update eggnogfool. On what do you base your prognostication?

Posted by: skipsailing28 | August 9, 2010 2:03 PM | Report abuse

@rmgregory:

The poverty rate in the late 1950s was 22%; it fell to 11% by 1973.

Posted by: eggnogfool | August 9, 2010 2:06 PM | Report abuse

@skipsailing:

http://nationalmortgageprofessional.com/news-ticker/08/10/no-change-fannie-freddie-policy-treasury

http://www.calculatedriskblog.com/2010/08/nonsense-rumor-on-fannie-and-freddie.html

Posted by: eggnogfool | August 9, 2010 2:12 PM | Report abuse

OK, if eggnogfool's numbers are correct, why didn't federal and state spending DECLINE? If there are fewer allegedly poor people requiring tax funded bailouts, why did entitlement spending continue to climb?

and if the numbers provided by eggnogfool are to be believed (there is no provenance for the numbers provided) at what point will liberals abandon transfer payments because their goal was met?

Posted by: skipsailing28 | August 9, 2010 3:01 PM | Report abuse

@skipsailing: "OK, if eggnogfool's numbers are correct, why didn't federal and state spending DECLINE? If there are fewer allegedly poor people requiring tax funded bailouts, why did entitlement spending continue to climb?

and if the numbers provided by eggnogfool are to be believed (there is no provenance for the numbers provided) at what point will liberals abandon transfer payments because their goal was met?"

It's hard to make out what you are saying here, but guessing that your broad question is "if poverty is declining, how come entitlement spending is increasing?"

(1) My post said that the poverty rate declined from the late 1950s until 1973.

(2) This year is 2010.

(3) The poverty rate is higher today than it was in 1973.

(4) There is an economic phenomenon known as 'inflation'

(5) In a society that uses a currency affected by a positive inflation rate, that which is held to a constant spending rate by a 'real' currency metric will appear to be growing by a nominal currency metric, and that which is growing by a 'real' currency metric will have its growth rate inflated (alternate usage) when viewed by a nominal currency metric.

(6) There is a demographic phenomenon known as 'population growth'

(7) In a society with a growing population, a constant poverty rate implies a growing poor population, and an increasing poverty rate implies a rapidly growing poor population.

(8) There exists an economic phenomenon known as 'GDP growth'

(9) In a society with inflation, population growth, and real per capita GDP growth, for a government to provide an unchanging set of services requires relatively rapid nominal gross spending growth.

(10) This is all fairly obvious.

(11) I'm guessing you are also conflating medicare and social security (as you use the term "entitlement spending") with welfare programs.

(12) That is stupid.

(13) In addition to making no sense, it adds the factor of demographic changes to the list above; obviously we will spend a larger share of our GDP caring for our seniors when the portion of our population that is over the age of 65 is higher.

(14) On the other topic of "when will liberals achieve their goal", the gap between rich and poor is currently widening.

(15) The programs listed and discussed in this thread serve to slow down the rate of growth of that gap.

(16) I doubt there are that many lefties who will at any point say "okay, now let's let the gap get way out of control." Maybe some communists and anarchists who think that allowing that will hasten the arrival of their preferred new world order, but not a lot.

Posted by: eggnogfool | August 9, 2010 3:36 PM | Report abuse

Looks like we are spending more on welfare programs than we are the Bush tax cuts.

Medicaid spending was $118 billion a year as recently as the year 2000. Today, it is $290 billion. Clearly, the program is unable to engage in adequate rationing.

Posted by: krazen1211 | August 9, 2010 5:58 PM | Report abuse

(17) The poor from the 1950s were genuinely poor. No food stamps, no ATFDC, no SSI, no Medicaid, no section 8 housing.

(18) Today's poor, not so much.

(19) To (17), add Obamacare.

(20) Tomorrow's poor, even less genuinely poor.

(21) Grant amnesty to illegal aliens, thus creating a vast new pool of "poor Americans".

(21) Liberals' transfer payments requirements will NEVER be met.

Posted by: bgmma50 | August 9, 2010 9:27 PM | Report abuse

yeah it is true most of us can save money on our car insurance by making few simple changes find how much you can save http://bit.ly/d4HSCH

Posted by: devinjoel10 | August 10, 2010 2:45 AM | Report abuse

Post a Comment

We encourage users to analyze, comment on and even challenge washingtonpost.com's articles, blogs, reviews and multimedia features.

User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions.




characters remaining

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company