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Fri11282014

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The American Welfare State

Throughout the presidential campaign, Republican candidates pointed to the number of food stamp recipients -- increasing from 33 million people in 2009 to 43 million in 2012 -- as a sign that poverty had skyrocketed under President Obama. But a new study suggests that the reason there has been such an increase in food stamp recipients during the last four years is even more pernicious.

 

The study's authors, George Mason University's David Armor and Sonia Sousa, argue that the food stamp program can no longer be regarded as an anti-poverty program because nearly half of its recipients are above the poverty line, many of them substantially so. And other anti-poverty programs have an even higher percentage of the non-poor among their recipients.

Armor and Sousa reported their findings in "Restoring a True Safety Net," an article published in the public policy magazine National Affairs. The study examined spending over the last thirty years for federal anti-poverty programs providing nutrition, health care, housing and cash assistance for the supposed poor. They show that the explosion in costs for these programs has little to do with the higher numbers of Americans who have fallen into poverty since the Great Recession (as the authors dub the economic downturn that began in 2008).

Spending for poverty programs received a big boost during the Bush years, a $100 billion increase over eight years. But the Obama spending spree dwarfed those increases. In his first two years in office, President Obama increased such spending by $150 billion, some of it in the 2009 stimulus package. The portion of the federal budget now attributable to fighting the "war on poverty" is now roughly equal to the entire defense budget ($666 billion compared to $693 billion), slightly less than spending on Social Security ($700 billion), but more than on Medicare ($551 billion). Taken together, federal spending on income transfers and other social benefits are now 2.76 times greater than spending for national defense.

How did this happen? The major changes occurred when the government allowed more lenient standards for eligibility for benefits. Most of these programs were originally designed to help those who lived below the official poverty line, which in 2011 was $11,702 for a single person and $22,811 for a family of four. But over the years, the federal government has lowered the threshold so that even those earning twice the income considered below poverty still qualify.

States play a role in determining who qualifies as well; and in several states, a family of four with income of over $45,000 a year is eligible to receive benefits. According to the study, over half of the recipients of food stamps (now known as the Supplemental Nutrition Assistance Program or SNAP), have income above the poverty line. Of the 40.3 million receiving food stamps in 2010 (the last year for which detailed figures are available), 20.4 were above the poverty cut-off. Of these, a whopping 8 million have income twice the poverty level.

And the non-poor receive more benefits than food stamps. Those living at 133-200 percent or more of the poverty level also constitute the greatest number of beneficiaries of Medicaid and the Children's Health Insurance Program. Even Temporary Assistance to Needy Families (TANF), which gives cash benefits to those supposedly in need, now supports those whose incomes are twice the official poverty definition; indeed 40 percent of TANF funds go to families whose incomes are more than 200 percent of poverty.

The policy implications of these findings are enormous. What once were programs to provide a safety net for the truly poor are now programs to boost the living standards of the lower middle class. More importantly, these changes reflect a sea change in social and economic policy. Those who have warned that America is heading toward a welfare state are wrong. We are already there. As Congress and White House officials debate the fiscal crisis, the failure to deal with the burgeoning dependency of millions of Americans will doom any long-term, viable solution.