Skip to comments.Obama to Spend $10.3 Trillion on Welfare
Posted on 03/28/2010 1:59:15 PM PDT by Conservative Coulter Fan
Since the beginning of the War on Poverty, government has spent vast sums on welfare or aid to the poor; however, the aggregate cost of this assistance is largely unknown because the spending is fragmented into myriad programs.
As this report shows, means-tested welfare or aid to poor and low-income persons is now the third most expensive government function. Its cost ranks below support for the elderly through Social Security and Medicare and below government expenditures on education, but above spending on national defense. Prior to the current recession, one dollar in seven in total federal, state, and local government spending went to means-tested welfare.
Means-tested welfare spending or aid to the poor consists of government programs that provide assistance deliberately and exclusively to poor and lower-income people. By contrast, non-welfare programs provide benefits and services for the general population. For example, food stamps, public housing, Medicaid, and Temporary Assistance for Needy Families are means-tested aid programs that provide benefits only to poor and lower-income persons. On the other hand, Social Security, Medicare, police protection, and public education are not means-tested; they provide services and benefits to persons at all income levels.
In fiscal year (FY) 2008, total government spending on means-tested welfare or aid to the poor amounted to $714 billion. This high level of welfare spending was the result of steady permanent growth in welfare spending over several decades rather than a short-term response to temporary economic conditions.
Of the $714 billion in welfare spending, $522 billion (73 percent) was federal expenditures, and $192 billion (27 percent) was state government funds. Nearly all state government welfare expenditures are required matching contributions to federal welfare programs. These contributions could be considered a "welfare tax" that the federal government imposes on the states. Ignoring these matching state payments into the federal welfare system results in a serious underestimation of spending on behalf of the poor.
Of total means-tested spending in FY 2008, 52 percent was spent on medical care for poor and lower-income persons, and 37 percent was spent on cash, food, and housing aid. The remaining 11 percent was spent on social services, training, child development, targeted federal education aid, and community development for lower-income persons and communities. Roughly half of means-tested spending goes to disabled or elderly persons. The other half goes to lower-income families with children, most of which are headed by single parents.
Total means-tested welfare spending in FY 2008 amounted to around $16,800 for each poor person in the U.S.; however, some welfare spending goes to individuals who have low incomes but are not below the official poverty line (about $22,200 per year for a family of four). Typically, welfare benefits are received not just by the poor, but also by persons who have incomes below 200 percent of the federal poverty level ($44,400 per year for a family of four). Around one-third of the U.S. population falls within this lower income range. On average, welfare spending amounts to around $7,000 per year for each individual who is poor or who has an income below 200 percent of the poverty level. This comes to $28,000 per year for each lower-income family of four.
Welfare spending has grown enormously since President Lyndon B. Johnson launched the War on Poverty. Welfare spending was 13 times greater in FY 2008, after adjusting for inflation, than it was when the War on Poverty started in 1964. Means-tested welfare spending was 1.2 percent of the gross domestic product (GDP) when President Johnson began the War on Poverty. In 2008, it reached 5 percent of GDP.
Annual means-tested welfare spending is more than sufficient to eliminate poverty in the United States. The U.S. Census Bureau, which is in charge of measuring poverty and inequality in the nation, defines a family as poor if its annual income falls below official poverty income thresholds. If total means-tested welfare spending were simply converted into cash benefits, the sum would be nearly four times the amount needed to raise the income of all poor families above the official poverty line.
One may reasonably ask how government can spend so much on welfare and still have great inequality and so many people living in apparent poverty. The answer is that the Census ignores nearly the entire welfare system in its measurements. In its conventional reports, the Census counts only 4 percent of total welfare spending as income. Most government discussions of poverty and inequality do not account for the massive transfers of the welfare state.
Since the beginning of the War on Poverty, government has spent $15.9 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare. In comparison, the cost of all other wars in U.S. history was $6.4 trillion (in inflation-adjusted 2008 dollars).
In his first two years in office, President Barack Obama will increase annual federal welfare spending by one-third from $522 billion to $697 billion. The combined two-year increase will equal almost $263 billion ($88.2 billion in FY 2009 plus $174.6 billion in FY 2010). After adjusting for inflation, this increase is two and a half times greater than any previous increase in federal welfare spending in U.S. history. As a share of the economy, annual federal welfare spending will rise by roughly 1.2 percent of GDP.
Under President Obama, government will spend more on welfare in a single year than President George W. Bush spent on the war in Iraq during his entire presidency. According to the Congressional Research Service, the cost of the Iraq war through the end of the Bush Administration was around $622 billion. By contrast, annual federal and state means-tested welfare spending will reach $888 billion in FY 2010. Federal welfare spending alone will equal $697 billion in that year.
While campaigning for the presidency, Obama lamented that "the war in Iraq is costing each household about $100 per month." Applying the same standard to means-tested welfare spending reveals that welfare will cost each household $560 per month in 2009 and $638 per month in 2010.
Most of Obama's increases in welfare spending are permanent expansions of the welfare state, not temporary increases in response to the current recession. According to the long-term spending plans set forth in Obama's FY 2010 budget, combined federal and state spending will not drop significantly after the recession ends. In fact, by 2014, welfare spending is likely to equal $1 trillion per year.
According to President Obama's budget projections, federal and state welfare spending will total $10.3 trillion over the next 10 years (FY 2009 to FY 2018). This spending will equal $250,000 for each person currently living in poverty in the U.S., or $1 million for a poor family of four.
Over the next decade, federal spending will equal $7.5 trillion, while state spending will reach $2.8 trillion. These figures do not include any of the increases in health care expenditure currently being debated in Congress.
In the years ahead, average annual welfare spending will be roughly twice the spending levels under President Bill Clinton after adjusting for inflation. Total means-tested spending is likely to average roughly 6 percent of GDP for the next decade.
That’s the plan. Get everyone hooked on a so-called freebie
and they’ll be a socialist voter forever.
Obama is inviting us all to have a second childhood.
Rector's seminal 2006 study, Importing Poverty: Immigration and Poverty in the United States: A Book of Charts, should be required reading for any policy maker.
The United States has the richest poor people in the world.
What are they calling poor? The so called poor around here have cell phones, money for drugs ,tobacco and cars.
And now pie. Really, really expensive pie.
Barack the Kenyan told “Joe the Plumber” that he wasn’t going to do this. The only problem is, the morons who live in this country didn’t believe him. They wanted to make “history” so they voted for “the black guy”.
Won’t be for long....within the next few years plus, the US will be going default and be assured, some serious cuts are going to take place in those vast social programs we have in this country....bet.
I think I’ll stop working to become poor, so the gov’t can make me rich.
My point exactly. I have to pass a drug test to get and keep a job, but the government takes my earnings to give to drug dealers. What a country!
Hu Jintao will call the shots financially for us in the long run.
He might try. But I think these clowns have reached the end of the road on taxes. Further tax increases are just going to reduce the GDP, and the deficit now exceeding $1.5 trillion, will balloon to in excess of $2 trillion per year. Needless to say, that won’t last long before the economic machine assumes the fetal position.
If they won't name the father, they don't get welfare.
Make those Feral Tom Cats pay, one way or another. Support, Castrate, Prison. Their choice.
I am sick and tired of the Tom Cats procreating on every street corner, with dozens of women. These procreated kids will someday procreate with their own sisters, cousins.
They have no way of knowing each other. Find the fathers, take a DNA and match it to all kids on welfare.
This is simple, will it be done, NO.
Millions, billions, trillions
Are really just
Omillions, Obillions, Otrillions
Progressive to the end
Envisions all the way to Ozillions
Wheelbarrows-full for the minions
Moodys’, Fitches, Standard and Poor
Triple AAA to BBB- evermore
Triple OAAA to OBBB
It’s all inevitable, you see
No never stop working. There are lots of folks depending on your taxes.
I see you are a health professional. I had a small medical equipment business for several years. I’d make deliveries to public housing areas where the residents lived better than me; big TVs, nice cars, stereos, big slobs on food stamps, drug dealers on every corner. It was such a motivating effect. Makes me so proud to work my butt off 60-70 hours a week and have 60% of my earnings taken from me via taxes.
Under the new measure, a family will be judged poor if its income falls below a certain specified income threshold. Nothing new there, but, unlike the current poverty standards, the new income thresholds will have a built-in escalator clause: They will rise automatically in direct proportion to any rise in the living standards of the average American.
The current poverty measure counts absolute purchasing power how much steak and potatoes you can buy. The new measure will count comparative purchasing power how much steak and potatoes you can buy relative to other people. As the nation becomes wealthier, the poverty standards will increase in proportion. In other words, Obama will employ a statistical trick to ensure that the poor will always be with you, no matter how much better off they get in absolute terms.
The Left has promoted this idea of an ever-rising poverty measure for a long time. It was floated at the beginning of the War on Poverty and flatly rejected by Pres. Lyndon Johnson. Not so President Obama, who consistently seeks to expand the far-left horizons of U.S. politics.
The weird new poverty measure will produce very odd results. For example, if the real income of every single American were to magically triple over night, the new poverty measure would show there had been no drop in poverty, because the poverty income threshold would also triple. Under the Obama system, poverty can be reduced only if the incomes of the poor are rising faster than the incomes of everyone else.
Another paradox of the new poverty measure is that countries such as Bangladesh and Albania will have lower poverty rates than the United States, even though the actual living conditions in those countries are extremely bad. Haiti would probably have a very low poverty rate when measured by the Obama system because the earthquake reduced much of the population to a uniform penniless squalor.
According to Obamas measure, economic growth per se has no impact on poverty. Since the beginning of the 20th century, the incomes of nearly all Americans have increased sevenfold, after adjusting for inflation. However, from Obamas perspective, this increase in real incomes had no impact on poverty, because the wages of those at the bottom of the income distribution did not rise faster than the incomes of those in the middle.
What has the Obama measure to do with actual poverty? Not much. For most Americans, the word poverty suggests destitution: an inability to provide a family with nutritious food, clothing, and reasonable shelter. But only a small number of the 40 million persons classified as poor under the governments current poverty definition fit that description. Most of Americas poor live in material conditions that would have been judged comfortable, or even well-off, two generations ago.
The governments own data show that the typical American defined as poor (according to the traditional, pre-Obama poverty measure) has two color televisions, cable or satellite service, a VCR or DVD player, and a stereo. He also has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had sufficient funds in the past year to meet his familys essential needs. While this individuals life is not opulent, it is far from the stark images conveyed by the mainstream media and liberal politicians.
Clearly, poverty as currently defined by the government has little connection with poverty as the average American understands it. The new Obama poverty measure will stretch this semantic gap, artificially swelling the number of poor Americans, and severing any link between the governments concept of poverty and even modest deprivation.
In honest English, the new system will measure income inequality, not poverty. Why not just call it an inequality index? Answer: because the American voter is unwilling to support massive welfare increases, soaring deficits, and tax increases to equalize incomes. However, if the goal of income leveling is camouflaged as a desperate struggle against poverty, hunger, and dire deprivation, then the political prospects improve. The new measure is a public-relations Trojan horse, smuggling in a spread the wealth agenda under the ruse of fighting real material privation a condition that is rare in our society. Source
Since Dingy Harry Reid had previously called the war in Iraq lost, can we just call the War on Poverty lost, too?
***Stay on welfare and dont get married. This message, however, is the very reason poverty continues to be a problem in the U.S. and why Lyndon Johnsons War on Poverty failed.****
Absolutly true! I remember when Johnson went to Appalachia to announce his program and job training to a hillbilly that had never held a job. Twenty five years later, that same hillbilly still had never worked a day of his life but had spent his life still drawing government WELFARE checks.
When my mom retired, she had only SSI to support her, plus a small job. One day a local social worker for the welfare department tried to get her to become a welfare recipiant. We found out that the ONLY reason she wanted mom on welfare was it gave the social worker more JOB SECURITY!
Mom never went on welfare.
Old joke from the 1960s...
A hillbilly is napping while his wife is reading the newspaper.
Wife: “Luke, it says here the president has declared war on poverty!”
Husband: “Well, if he wants me in that war he is gonna have to draft me!”