Does the federal government spend more on ‘welfare’ than anything else?
By Glenn Kessler,
“There are roughly 80 welfare programs overall that together comprise the single largest item in the federal budget — larger than Medicare, Social Security, or defense.”
— Sen. Jeff Sessions (R-Ala.), opening statement at Budget Committee hearing, Feb. 12, 2013
At The Fact Checker, we try to deal with facts, not opinions or philosophical disputes. But a recent assertion by Sen. Sessions, the senior Republican on the Budget Committee, about the size of “welfare programs” underwritten by the federal government has raised some interesting issues.
Given the complexity of this debate, today we will first explore how he comes to this conclusion. Tomorrow, we will look more closely at data — in particular, a chart — that he has used to illustrate his point.
Session comes up with his list of 80 welfare programs from an October 2012 report by the Congressional Research Service, titled “Spending for Federal Benefits and Services for People with Low Income.” The report concluded that $746 billion was spent on such programs in fiscal year 2010, with about half in the health area, primarily Medicaid.
The report was an update of an earlier CRS report, which included a number of caveats. In particular, the earlier report noted that “there is no single label that best describes all programs included in this report:”
As these terms are commonly understood, they are either too broad or too narrow to collectively characterize programs included in this report.
“Social welfare” and “social safety net” are sometimes understood to include social insurance programs in addition to programs explicitly targeted on low-income populations.
“Public welfare” often is understood as a more narrow set of programs that primarily provide cash or near-cash benefits to low-income people. While such programs are included here, programs that provide in-kind benefits and services also are discussed.
“Income-tested” or “means-tested” might be used to describe programs in this report, although...some programs target assistance toward low-income communities or entities but do not specifically apply an income or means test to individual participants or beneficiaries.
Sessions, in his statement, ignores such caveats and simply declares all of the spending as “welfare.”
Stephen Miller, his spokesman, said the senator is trying to combat the conventional wisdom in Washington, which he said treats such programs as distinct entities, with “welfare” being thought of as only cash-assistance programs. That’s why, he said, many people believe that Social Security, Medicare and the Defense Department are the bigger sources of government spending.
“I’m surprised they did not load up the report with more caveats,” Miller said. “We reject all of their caveats. The caveats are frankly preposterous.”
As we noted, this is in many ways a philosophical dispute. Virtually all of these programs are “means-tested” — which is Washington speak for programs for which people qualify based on financial need, not prior financial contributions (such as Social Security or unemployment insurance). Some conservatives will argue that “means-tested” is welfare by another name.
But the broad-brush approach also obscures differences, which is why CRS offered so many caveats. Health spending, such as Medicaid, accounts for nearly half of the total, but Medicaid increasingly is aimed at the elderly (people in nursing homes) or the disabled. “Medicaid spending per participant is much higher for people who are elderly, disabled, or pregnant than it is for nondisabled children or for working-age adults who are not disabled or pregnant,” the Congressional Budget Office said in a report this month.
Medicaid spending has increased in large part because health costs have soared — and spending will jump even more under the Obama health care law as even more people above the poverty threshold are added to its rolls. Indeed, many budget analysts believe that health-care spending is the most important issue facing the federal budget, so it might be a mistake to separate Medicaid and Medicare.
The refundable portion of Earned Income Tax Credit is also counted, but those monies only go to people who earn money through employment — hardly the image of the welfare queen. Indeed, President Reagan was a huge fan of the EITC, calling it in 1986 the “best anti-poverty, best pro-family, the best job creation measure to come out of Congress.”
The Bottom Line
Sessions’ use of the phrase “welfare” is intended to shock. Though he derives his figure from the Congressional Research Service, he has ignored CRS’s caveats about how to describe these programs. That’s his right to do so but, tomorrow, we will examine whether he has applied this data in an accurate way. (Here is a link to the follow-up article.)
Check out our candidate Pinocchio Tracker