“Here's the truth that the president won't tell you. Of every dollar that you hold in your hands, 70 cents of that dollar that's supposed to go to the poor doesn't. It actually goes to benefit the bureaucrats in Washington, D.C. — 70 cents on the dollar. That's how the president's caring works in practice. So $3 in food stamps for the needy, $7 in salaries and pensions for the bureaucrats who are supposed to be taking care of the poor. So with all due respect, I ask you, how does this show that our president cares about the poor?”
— Rep. Michele Bachmann (R-Minn.), speaking at the Conservative Political Action Conference, March 16, 2013
Some readers might question why we are checking a statement by Bachmann for a second day in a row. We concede that it might seem a bit much, but her assertions often reflect comments that have bounced around, unchecked, in the blogosphere.
So we were especially curious about the “truth” that 70 percent of the Food Stamp program went to “bureaucrats.” It took us a while to track down the original source of this claim, but it turns out that he believes he has been frequently misquoted. So, with all due respect to Rep. Bachmann, it seems worthwhile to set the record straight.
Remember that child’s game of telephone, in which the whispered information gets increasingly distorted? That’s what happened here.
There are two key parts to Bachmann’s statement. First, that 70 percent of the money that is supposed to go to the poor actually goes “to benefit the bureaucrats in Washington, D.C.” Second, that this translates into just $3 (out of every $10) in food stamps going to the needy.
Our story starts with a 1990 speech by Robert L. Woodson Sr., founder of the Center for Neighborhood Enterprise, before the Heritage Foundation during a lecture series observing Black History Month. Woodson posed a question: Is the black community a casualty of the war on poverty?”
At one point in the speech, Woodson took aim at people who he believed profited from the war on poverty, what he called the “poverty industry:”
It is the same with the poverty programs. Seventy cents of every dollar spent 25 years ago went directly to poor people. Today, seventy cents of every dollar goes not to poor people, but to those who serve poor people --the poverty industry. Who makes up the poverty industry? They are middle-income blacks and middle-income whites. And so what you have today is a situation in which there is a group of people who benefit from the existence of an underclass. And as long as there are such perverse incentives for the maintenance of an underclass, you will have one.
(Woodson’s source for the shift in spending appears to be from Volume One of a 1986 government report titled “Up from Dependency,” but we could not easily locate a complete copy to fully assess the accuracy of his observation. Anti-poverty advocates might question this assertion, but that’s another matter.)
(UPDATE: A reader provided us with a copy of both volume 1 and 2 of the report. The report was making a point about official poverty statistics, noting that noncash benefits were not counted in official poverty statistics. “In 1960, three-quarters of all welfare came in the form of cash; by 1985 only 24 percent did,” the report said, arguing that “non-cash benefits diminish personal choice and self-responsibility among welfare recipients.” Woodson appears to have taken this statistic and assumed that all those noncash benefits went to middlemen.)
Then, in 2003, Michael Tanner of the libertarian Cato Institute took note of Woodson’s remarks on his book, “The Poverty of Welfare: Helping Others in Civil Society.” His book advocated substituting private charity for government welfare programs.
On page 96, Tanner noted:
In reality, however, the money is siphoned off by the bureaucrats, administrators, service providers, and others who make up the social welfare system. Robert Woodson, president of the National Center for Neighborhood Enterprise, reports that in 1965, 70 percent of every dollar went director to poor people. Today, 70 cents of every door goes, not to poor people but to government bureaucrats and others who serve the poor. Few private charities have the bureaucratic overhead and inefficiency of government programs.
In a footnote to the “70 cents” sentence, Tanner emphasized: “It is important to note that the 70 percent figure is not solely government administrative overhead. That figure also includes government payments to the nonpoor on behalf of the poor. For example, Medicaid payments go to doctors. Housing subsidies are frequently paid directly to landlords.”
Somehow, Bachmann missed the fact that Tanner was talking about much more than government bureaucrats.
“I have seen this quoted back to me,” Tanner said in an interview Monday. “It is always quoted back to me wrong. I wrote about bureaucrats and others who serve the poor” — the whole panoply of people who receive federal dollars because of anti-poverty programs. Or, as Woodson originally put it, the “poverty industry.”
Asked about Bachmann’s claim, Tanner said: “That’s not what I said.”
Bachmann then went completely off the rails when she applied that misinterpreted 70-30 ratio to the Food Stamp program, which is officially known as the Supplemental Nutrition Assistance Program (SNAP).
Tanner said he did not intend for these figures to apply to what is effectively a cash program. (Recipients receive a plastic Electronic Benefits Transfer card to buy food at stores.) “The overhead on these things are not outrageous,” he said.
Indeed, the 2013 budget documents submitted to Congress by the Agriculture Department, which manages SNAP, shows that less than 6 percent of the program is spent on administrative costs. Only 166 people manage the $82 billion food-stamp program — many outside Washington — and the budget document says that staff salaries amount to one-third of 1 percent of USDA’s budget for food and nutrition programs.
Considering such statistics are easily available to a member of Congress, let alone his or her staff, it’s a wonder she never bothered to check. She just assumed “government bureaucrats” were consuming funds reserved for poor people.
A Bachmann spokesman did not respond to a request for comment.
The Pinocchio Test
Bachmann made two key errors here. First, she misinterpreted Tanner’s point. Then, she blithely assumed the ratio was applicable to the Food Stamp program when budget data show she’s off by more than a factor of 10 (or a factor of 200, if you just count salaries.)
So Bachmann yet again earns Four Pinocchios. But there really aren’t enough Pinocchios for such misleading use of statistics in a major speech.
Check out our candidate Pinocchio Tracker