Welfare Programs Are Not The Cause Of America’s Financial Problems

The one thing I am learning, both first-hand (as a person receiving SNAP benefits) and second-hand (as someone interested in the subject who is researching it), is that welfare is a complicated topic. It is so complicated that two different people can both be right while apparently supporting diametrically-opposed statements, but still be talking at cross-purposes and misunderstanding each other. They are probably using different statistics (or no statistics at all, just personal anecdotes or assumptions or “friend of a friend” stories). They may have different ideas about what is and is not “welfare.” (Do you think Social Security is welfare? Was the controversial Troubled Asset Relief Program (the “bank bailouts”, or TARP; which, while we’re mentioning it, was passed under the Bush administration) welfare? Are Pell Grants welfare?) The people fighting about “welfare” topics may or may not understand how certain programs are funded (not all “welfare” is paid for with income taxes). And so on.

Just to stave off the inevitable flood of “but I have totally for realz seen people abusing welfare with my own eyes!” anecdotes that welfare-related articles tend to encourage, here is where I urge anyone who has actually seen abuse of welfare programs to report that abuse. There are a few reasons I can think of why you would choose not to report hypothetical abuse:

  1. You have not actually witnessed any “welfare fraud” or assistance program abuse first-hand. You may have seen a stranger out and about in public and made some assumptions about that person, but you have no actual information about his or her finances, what (if any) government assistance he or she is receiving, or how he or she is using it.
  2. You are parroting an anecdote based on hard-to-kill cultural stereotypes about welfare recipients, including the infamous Welfare Queen persona (which has some problematic racist undertones), and assuming that the stereotype is true and that “everyone knows” the stereotype is true.
  3. Since most people who are on some form of welfare are ashamed of it and do not discuss it (much like most of us do not talk openly about our finances in general), you would probably be shocked to know how many of your friends, family members and neighbors are currently receiving some form of assistance. They may not fit your preconceived notion of what a “welfare recipient” is supposed to look like.
  4. Yes, you have witnessed some actual abuse or fraud. You chose not to report it, but — oddly enough — you still complain about abuse and fraud anyway. I have to wonder how complaining about the problem benefits you more than doing something proactive about a problem, since it is clearly an issue about which you have strong feelings and opinions.

So, please, report any actual fraud you see. I have helpfully provided you a link to help you out with that: report that abuse! If you fail to report that abuse, and instead choose to just talk smack about Those People, then you are part of the problem, and other people are pretty sick of hearing your noise.

But I digress, as we’re talking about Welfare and not People Who Are Nasty About People Relying Upon Welfare, and Welfare is a topic that gets nearly everyone upset. It is also (unfortunately) more and more relevant as more and more of our neighbors (and maybe even our own friends and families!) experience financial or un(der)employment-related struggles, fall through the cracks, or experience hard times. It becomes more relevant as the “face” of welfare (in this case, I mean “food assistance” and Medicaid when I say “welfare”) changes and starts to include predominately Caucasian middle-class graduate students and people who have earned Ph.Ds and who are actually working full-time.

Just because your neighbor isn’t talking about it–and most people who experience financial distress are ashamed and do not trumpet that information around–it does not mean that he or she is (or isn’t) relying on a government assistance program (or two) to make ends meet.

What do you mean when you say “welfare”?

What I learned is that I have to be very, very careful to clearly define my terms, and I did not do that as well as I should have. For that lapse, I apologize. To clarify, when I have talked about welfare in the past, I have mostly been referring to SNAP, WIC, TANF and SSI:

  1. Food benefits like Supplemental Nutrition Assistance Program (SNAP), which is “financial assistance for food purchasing for low- and no-income people…also known as the Food Stamp Program…[t]o be eligible for food stamps, the recipients must have incomes below 130 percent of the poverty line, and also own few assets” and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), which is “a child nutrition program for healthcare and nutrition of low-income pregnant women, breastfeeding women, and infants and children under the age of five; [t]he eligibility requirement is a family income below 185% of the U.S. Poverty Income Guidelines“.
  2. General welfare programs like the Supplemental Security Income (SSI) program which “provides stipends to low-income people who are either aged (65 or older), blind, or disabled” and “Temporary Assistance for Needy Families (TANF), which “provides cash assistance to indigent American families with dependent children”.

There are some problems with defining the poverty line, as the methodology “was created in 1963 by food and nutrition economist Mollie Orshansky and hasn’t been updated since“, but that is the standard used to determine if a family or individual is “poor enough” to qualify for government assistance. As Salon puts it:

“[Orshansky’s] method [for determining the poverty line], though arguably appropriate at the time, is incredibly crude by modern standards. Her idea was to calculate the cost of a nutritionally adequate diet for a given-size family. Then she used the early-‘60s rule of thumb that food was about one-third the typical family’s budget. So calculate the income needed to prevent malnutrition, triple it, and there’s your poverty line. Needless to say, this has only a hazy relationship with modern living standards. Worse, because at the time there were few government programs designed to help the poor, it refers to income before taxes and cash transfer payments. The formula also neglects to include the value of in-kind public services such as food stamps and Medicaid, and smaller programs like housing vouchers.”

Unfortunately, I have also said “welfare” on occasion when I intended to refer to all goverment-distributed social assistance programs, which do include the aforementioned programs but also can refer to:

  1. Social insurance (Social Security)
  2. Healthcare (Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE, Veterans Health Administration (VHA), Alcohol, Drug Abuse, and Mental Health Services Block Grant (ADMS Block Grant), Patient Protection and Affordable Care Act (PPaACA or “Obamacare” and more)
  3. Public education (which includes training, employment, and social services function: elementary, secondary, and vocational education; higher education; and research and general educational aids; see also programs like Head Start, PELL grants, school lunches, government subsidies for private charitable and social outreach programs like the Boys and Girls Clubs of America, and more)
  4. Housing assistance (specifically Section 8)
  5. Food assistance for groups not covered by SNAP or WIC, such as elderly or mentally- or physically-impaired adults in non-residential day-care settings who benefit from the Child and Adult Care Food Program (CACFP)
  6. Benefits for federal retirees and veterans
  7. Transportation
  8. Scientific and medical research (NASA falls under this category, which includes general science, space, technology, and health research, and more)
  9. Miscellaneous expenditures, which include corporate subsidies and handouts, bailouts like TARP, government grants for education and the arts, infrastructure expenditures we all benefit from, and so on. This category is the most problematic, as some people bundle bailouts under the “welfare” umbrella, and others include education, public properties like parks and museums, infrastructure and/or national security expenses (which doesn’t just include the military, but also law enforcement officers, firefighters, 911 services, and so on…for our purposes, we are going to assume those expenses are not welfare).

As Wikipedia puts it: “Social programs in the United States are welfare subsidies designed to aid the needs of the U.S. population. Proposals for federal programs began with Theodore Roosevelt’s New Nationalism and expanded with Woodrow Wilson’s New Freedom, Franklin D. Roosevelt’s New Deal, John F. Kennedy’s New Frontier, and Lyndon B. Johnson’s Great Society. The programs vary in eligibility requirements and are provided by various organizations on a federal, state, local and private level. They help to provide food, shelter, education, healthcare and money to U.S. citizens through primary and secondary education, subsidies of college education, unemployment disability insurance, subsidies for eligible low-wage workers, subsidies for housing, food stamps, pensions for eligible persons and health insurance programs that cover public employees.”

What I may have thought was self-evident (“I am talking about helping hungry, needy people”) turns out to be a lot more confusing, and part of the onus for that misunderstanding is on me for being foolish enough to assume I had a pretty good handle on the topic just because I am living what it is like, daily, as a SNAP beneficiary (but I am not a statistician nor an economist, so what was I thinking?!), and part of that is due to the incredibly confusing way that different statistics are presented, how both partisan and non-partisan groups which focused on taxes and welfare programs and social issues often (deliberately?) cloud the most pertinent and relevant issues, and when even the government itself vomits reams and reams of enormous and dense .PDF and .XLS files full of endless columns of numbers at you, which all makes it very difficult to figure out where all the money is actually going and how much, on average, we are each paying in taxes.

Whatever it is, it is always TOO MUCH, amirite?

 

What do I, personally, pay for with my taxes?

According to John W. Schoen, a Senior Producer at MSNBC, there are no simple answers to that question. In a 2008 article, Schoen explained why it is difficult for the average taxpayer to comprehend where his or her dollars end up.

  1. Citizens pay taxes every calendar year on April 15th, while the government spends based on a fiscal year, which begins October 1st. The two calendars don’t match up. This makes understanding what dollars do where a little trickier, because the calendars do not synch up.
  2. According to Gerald Prante, a senior economist at the Tax Foundation, the “average tax bite” on individuals has remained flat–that means it has not changed dramatically–since 1970. That indicates that money is being allocated and de-allocated and shifted around, because the budget bite for different agencies and programs has not been static. That means that looking at last year’s data may demonstrate a very different picture from looking at the year before’s data, especially when you’re trying to determine if a particular program is using funds responsibly, and if people are actually being helped.
  3. According to the Commerce Department’s Bureau of Economic Analysis, about two-thirds of your taxes go to the Feds (roughly speaking, anyway), while the remaining third went to your state, county or local government. This also clouds the picture, because different areas have different needs, and the breakdown shifts accordingly. If you live in a so-called “red state,” your fellow citizens consume more funds for tax-supported social service and social safety net programs than they pay for, and so-called “blue states” pay more of their taxes for the same public benefit programs than their citizens consume. In those same states, however, there may be local governments (say, a large city’s) where more services are consumed than paid for, or vice versa. Paul Krugman calls this paradox (where conservative states rely most on government assistance while also supporting conservative politicians who seek to gut social safety nets) “Moochers Against Welfare.”

It is confusing, and when you say “where did my money go?” you probably mean “how much of my money is going to someone other than me?” and this is a question that is only best answered once we figure out where you live (Red States are Welfare Queens), what “invisible” services and programs you yourself might be benefiting from that you don’t believe are “welfare” (or government-funded, citizen-supported) programs or which are government-provided benefits you don’t think about too often (such as small business loans, tax breaks for your marital status or number of kids or your charitable giving, a well-maintained infrastructure, arts funding, Pell grants for students, police officers and fire fighters and the 911 emergency assistance service, free public television and radio broadcasts, weather forecasts and disaster preparedness and relief, clean and safe air and water and medicine, well-maintained national parks and museums, technological and scientific research and space exploration, and so on), and how much you personally paid in taxes (and how many, if any, of your assets were socked away in tax shelters or otherwise hidden or protected with other tax-avoiding maneuvers).

John Schoen breaks down how your taxes are spent (or to be precise, how they were spent in 2007), but, oddly, he bundles certain things together (such as Social Security (which is funded through our paychecks), Medicare (which is collected through specific contributions and not income tax), and “income security” programs (which are mostly but not entirely funded by tax dollars, and which do include government assistance for the disadvantaged) that are usually separated when “how the government spends our money” is discussed. When one combines Social Security, Medicare / Health and Income Security, these bundled expenses appear to cost more than all the expenses that fall under the general category of National Defense, which is actually the largest governmental expense.

Even more confusingly, when the same guy did another analysis, he broke things down into different categories. He’s not wrong, mind you, but it is difficult to walk away from either article feeling as if you have a truly good handle on the “where’s my money go?” question, and that is not Mr. Schoen’s fault. He does a masterful job putting it into understandable “average person budget” and plain English terms, but the simplicity he achieves still requires that some lines get blurred between several government program categories. (For instance, would school lunches be counted by the average taxpayer as food benefits, which are typically included in “income security” programs, or would the lunches be counted as one of many branches of the bundled “education”-related social programs?)

My Esoteric at HubPages (a cost-benefit analyst) believes that the answer to “How much per tax dollar I spend goes towards welfare programs?” is about six cents (or nine cents, if you don’t consider a refund for the TARP bailouts to be repaid welfare expenditures):

“I took a look at the 2012 Federal Budget actuals for 2010 to calculate what percentage of your taxes go toward what part of the budgets. The table below presents my findings [that] show how many cents [per] tax dollar go [towards which] expenditure area.”

REVENUE SOURCE OREXPENDITURE AREA NUMBER OF CENTS FROMYOUR TAX DOLLARUSED FOR THIS PURPOSE
Income Tax
-$1.00
Interest on the Debt
$ .06
Security Programs
$ .24
non-Welfare Related Social Secuity
$ .20
non-Welfare Related Medicare
$ .13
TARP (returned funds)
-$ .03
non-Security Programs
$ .24
Mandatory Welfare Related Programs      
$ .09
You Should Be Able To See The Obvious… but I have some remarks anyway.
  1. If you consider TARP being considered a form of welfare…then only 6 cents out of every tax dollars goes toward providing welfare services to those who can’t provide for themselves. If you don’t, the figure increases all the way up to 9 cents.
  2. The other $ .91 or 91% of your taxes go support the operations of the government or defense. (You ultimately get the Social Security and Medicare back.)
  3. Individual income taxes only provided 26 cents of the revenue dollar needed to fund the 2010 expenditures. 37 cents came for other revenue sources and the last 37 cents was borrowed.

You remember the old phrase, “Hey, mister, can you spare a dime?” Well, after 100 years of inflation the best that can be mustered today is, “Hey mister, can you spare six cents?” Says something about American society, doesn’t it?”

Well, six cents per dollar isn’t bad. The sales tax in my area is higher than that! Even nine cents per dollar isn’t so bad. Is this really what everyone is fussing about? And, of that (let’s say) nine cents, what welfare programs are included? Looking at his data, he appears to be bundling together all social assistance programs which focus on the financially disadvantaged (while excluding Social Security and Medicare, et cetera, which, as we already discussed above, are not funded directly from “our tax dollars”).
The Center on Budget and Policy Priorities (CBPP) says only about 13% of our annual budget goes to fund social safety-net programs (and they also exclude Social Security and health insurance-related programs) and state that they “based [their] estimates of spending in fiscal year 2011 on the most recent historical data released by the Office of Management and Budget (OMB)”: “About 13 percent of the federal budget in 2011, or $466 billion, went to support programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship. […] These programs include: the refundable portion of the earned-income and child tax credits, which assist low- and moderate-income working families through the tax code; programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance; various forms of in-kind assistance for low-income families and individuals, including food stamps, school meals, low-income housing assistance, child-care assistance, and assistance in meeting home energy bills; and various other programs such as those that aid abused and neglected children.  Such programs keep millions of people out of poverty each year.”
So, nine cents per tax dollar — and about 13% of the government’s total annual budget — go toward social safety net programs that benefit the poorest, the most disadvantaged, and the least powerful among us. Should we really begrudge that?

Who, exactly, is receiving the most welfare?

When I noted that “more whites” are on welfare in a previous article, I promptly received confirmation of that statement when many readers commented and hastened to point out that, statistically, there are more white folks overall in the United States. Yes, exactly. The fact that there are more white people on welfare because there are more white people overall makes a lot of sense, doesn’t it? My point was that it seems odd that we define the “face” of welfare by imagining a person of color (usually as a “Welfare Queen”) when the higher percentage of people receiving a form of welfare are white. It is also problematic when certain (usually Republican) politicians knowingly perpetuate racial welfare-related stereotypes to score points with a traditionally discriminatory and under-informed block of the electorate.

Pig Newton

 from Huffington Post says, citing census data, “The figures are well known. More whites  are on welfare, use food stamps, and public health services numerically than blacks and Latinos. More whites rely on social security, Medicare, and farm supports statistically and proportionally than blacks or Latinos. In Mississippi and Alabama the poverty and unemployment rate among whites is among the highest in the nation.”

The point of confusion is that–within racially-separated groups–more non-whites are struggling in poverty than are whites. I’m going to make up some numbers for illustration purposes, but don’t let it freak you out. Just bear with me. Let’s imagine that we have a population of 500 whites, 300 people of color who identify as “black” and 100 people of color who identify as being “other,” meaning neither white nor black. Out of those 500 whites, let’s say 200 are on welfare, and there are 225 blacks (out of 300) on welfare and 10 “others”  (out of 100) on welfare. That means (a) that there are more whites numerically, in total, on welfare than blacks or “others,” (b) that there are more blacks and “others” combined than whites and (c) that there are a greater percentage of  blacks on welfare, when compared to the total number of blacks in the population, than there are whites on welfare when compared to the total number of whites in the population. (Now forget those made-up numbers, because there is no correlation to real stats, and they were just used to make the math and comparisons easier.)
The thing is, no one is saying any of this is untrue. The problem is that there has been a confusion between apples and oranges, where ‘apples’ means “the total number of people who happen to identify as white who are using social safety net programs” and where ‘oranges’ means getting into examining how many people (within a certain racial group, i.e., black people) are on assistance overall as compared to the percentage of white people overall.
Some non-made-up numbers:
  • 29 million people are on welfare
    • White: 11,661,000 (39%) ← This number is larger.
    • Black: 11,362,000 (38%)

Wikipedia says:

  • [Total] US population — 313,544,041
    • White: 227,005,885 (72.4%) ← This number is also larger.
    • Black: 39,506,549 (12.6%)
Whites: 11.661,000 / 227,005,885 * 100 = 5.13%
Blacks: 11,362,000 / 39,506,549 * 100 = 28.75% ← Now this number is larger.
“That means the total percentage of all white people in america on welfare is 5.13%, while the total percentage of all black people in America on welfare is: 28.75%.”
And that is correct, too! That’s just it — saying there are “more white people on welfare” was not intended to ignore the fact that a higher percentage of non-white individuals and families are struggling in poverty when compared to white individuals and families. It was just stating a fact.
Unfortunately, I failed to be very, very clear, and, when talking about welfare issues, one must be very, very clear indeed.
We could write–and indeed there have already been written–many articles on why it is problematic to compare racial groups to each other rather than looking strictly at total numbers, but two analogies may help get that conversation rolling:
First analogy: Some people start life on third base, while other people can’t even get selected to swing the bat. Some aren’t even allowed inside the ballpark. If a successful businessman starts off in life on third base due to having the good fortune to be born in good health and with sound mind to financially comfortable WASP parents in a safe neighborhood with access to good schools, is he truly a “self-made” man? Is he really self-made when he can rely on networking with and trading favors with his parents’ successful friends, or his frat brothers, or his fellow Lions or Shriners or Moose or Masons, or his church, or any of a number of “white welfare” programs? Is he really “self-made” when he got business loans and relied on the same social framework all our tax money collectively helped build and maintain? The short answer is “No, not entirely, because no one is entirely self-made and achieving success in a vacuum”, and that is just a hard truth, and not intended to disparage anyone’s good ideas, smarts, initiative, or hard work.
Melissa Harris-Perry recently confronted the (smug) myth that the rich “risk more” than the poor, and made some good points: “What is riskier than living poor in America? Seriously, what in the world is riskier than being a poor person in America? I live in a neighborhood where people are shot on my street corner. I live in a neighborhood where people have to figure out how to get their kid into school because maybe it’ll be a good school and maybe it won’t. I am sick of the idea that being wealthy is risky. No! There is a huge safety net that whenever you fail will catch you and catch you and catch you. Being poor is what is risky. We have to create a safety net for poor people. And when we won’t, because they happen to look different from us, it is the pervasive ugliness! We cannot do that!”
What is more risky than being poor?
Second analogy: “Straight White Male: The Lowest Difficulty Setting There Is”. John Scalzi wrote this article of the same title (later re-posted at Kotaku) that explained this concept beautifully: if you are lucky enough to be born into a privileged group (for example, if you are male, straight, able-bodied, middle-class, and White Anglo-Saxon Protestant), you play the Game of Existence on the “easy” setting. Most people of color, or poor people, or non-male people, or non-straight people, or members of minority faiths, or people with disabilities or chronic illnesses (et cetera) are forced to play on the “expert” setting, they aren’t given the standard rules book, and they do not get to use any cheat codes.
Given that an average group of white people are generally going to be more privileged by default than an average group of non-white people (here’s where investigating socioeconomic status (SES) factors might be very enlightening), I find it significant that more white people in total are now relying on welfare programs. That seems significant to me, and, again, it makes the pernicious “duplicitous Person of Color scamming the system” stereotype all the more offensive. The color of the average “face of welfare” is changing.

It is time for the “Welfare Queen” myth to die.

What is most obnoxious about the Welfare Queen myth is that it can be traced back to Ronald Reagan indulging in hyperbole to outrage his conservative Republican base. Stupid Uncle Bonzo.
What Reagan actually said, according to Wikipedia: “During his 1976 presidential campaign, Reagan would tell the story of a woman from Chicago’s South Side who was arrested for welfare fraud: “She has eighty names, thirty addresses, twelve Social Security cards and is collecting veteran’s benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She’s got Medicaid, getting food stamps, and she is collecting welfare under each of her names. Her tax-free cash income is over $150,000.”
The closest known real life example, according to Wikipedia: “In 1976, the New York Times reported that a woman from Chicago, Linda Taylor, was charged with using four aliases and of cheating the government out of $8,000. She appeared again in the newspaper while the Illinois Attorney General continued investigating her case. The woman was ultimately found guilty of “welfare fraud and perjury” in the Circuit Court of Cook County, Illinois.”
So one woman scammed the government out of a total of eight thousand dollars and went to jail for it and from that, Reagan invented multiple imaginary dead husbands, a six-figure “salary” and multiple Social Security cards…in short, he created the Welfare Queen stereotype by wildly exaggerating information about a real, if rather minor and swiftly punished, criminal act.
Compare and contrast, my friends. That one fairy tale The Gipper told us has led to a lot of misery, and most of it has been directed at the weakest members of our society: those who are the least capable of defending themselves. Are we a country of unkind assholes who lack compassion for our neighbors, now?
Some studies have shown that the “Welfare Queen” story incites racial animosity.
O.K. Kai (of the 40 Acres And A Cubicle blog) comments: “The Nieman Foundation for Journalism at Havard University published a study entitled “The Welfare Queen Experiment” in which Black and White participants watched news clips about a lazy welfare recipient named Rhonda.  Separate test groups watched news stories that showed a photo of either a black Rhonda or white Rhonda for a few seconds. Each group was also given a survey to measure attitudes toward race, gender and welfare.  White participants showed a 10% increase in anti-black sentiments when Rhonda was Black and surprisingly, an increase of 12% when Rhonda was White.  This suggests that the Welfare Queen archetype and the distorted view of Black Americans on welfare is well entrenched in the White American psyche. The majority of welfare recipients are non-urban and White.  The majority of food stamp recipients have jobs or are children, so comparing paychecks to food stamps makes no sense.”

Left: Welfare recipient. Right: A leech on society’s “job-creators”

Let’s get this one thing straight: there are no Welfare Queens out there driving Cadillacs, having five kids specifically to get extra financial benefits from the government (or successfully scamming the government to pay for some non-standard expensive medical treatments or procedures). You’re perhaps thinking of Ann Romney with her multiple Cadillacs, her five tax deductions sons (who have undoubtedly benefited from generous and un(der)-taxed loans and financial gifts from their parents), and her $77,000 tax deduction for her so-called “therapy horse” … and we know we haven’t even seen all the tax shelters and tax havens the Romneys have benefited from.

Do you know what’s true (and what’s not) when it comes to welfare topics?

There are a lot of myths about welfare. Here are four of the most persistent:
MYTH #1: Welfare benefits go to minority women who never leave the dole (the “Welfare Queen”).
  • More whites than blacks or Hispanics receive aid (again, we’ve discussed this; see above if you’re still confused by the word “more” and feel the need to nerd out over stats that wind up helpfully proving the actual point being made).
  • Two out of three welfare recipients are children, not adults.
  • Three out of four women on aid get off welfare within two years.
  • TANF benefits are limited to five years (60 months) total. TANF benefits are not renewed or extended if you have additional children. “You can only get TANF for 5 years. This limit applies to all adults and heads of households. […] Adults who reach the 5 year limit cannot collect TANF for themselves or their children. If you get any benefits from TANF during a month, even if you only receive $1, that month will count as one month against your 5 year limit. Periods of receipt need not be consecutive to count towards the 5 year limit.”
  • Alternet says: “Aside from the fact that [the welfare stereotype is] racist, it’s just not true. According to the U.S. government, the majority of welfare recipients are white, live in the suburbs, have two kids, want to work, and stay on welfare an average of only two years. […] While conservatives talk about welfare recipients being a burden on the public, many don’t realize how little we spend on public assistance. The attack on social spending is based on myth. In 1996, all spending on “welfare” programs, including food stamps, free school lunches, unemployment checks, housing assistance, legal defense and the rest came to somewhere around $130 billion. Only counting direct assistance programs like AFDC, however, it was about $50 billion — approximately 4% of the $1.23 trillion budget. When compared to the whole federal budget, the money spent on welfare is trifling, especially when you look at other, truly wasteful federal budget items. Waste and fraud in military spending cost an estimated of $172 billion, while a host of business subsidies — no-strings federal gifts to profitable corporations — cost another estimated $170 billion in taxes. Then there are capital gains and other tax loopholes benefiting the wealthy that cost over $130 billion a year. It looks like the “burdened taxpayers” have bigger things to worry about besides welfare.”
  • The real “Welfare Queens” are corporations. We spend $59 billion on human welfare programs, “and $93 billion were devoted to corporate welfare. This is about 5 percent of the federal budget. To clarify what is and isn’t corporate welfare, a “no-bid” Iraq contract for the prestigious Halliburton, would not be considered corporate welfare because the government technically directly receives some good or service in exchange for this expenditure. Based on the Pentagon’s Defense Contract Audit Agency (DCAA) findings of $1.4 billion of overcharging and fraud, I suppose the primary service they provide could be considered to be repeatedly violating the American taxpayer. On the other hand, the $15 billion in subsidies contained in the Energy Policy Act of 2005, to the oil, gas, and coal industries, would be considered corporate welfare because no goods or services are directly returned to the government in exchange for these expenditures”.

MYTH #2: Welfare encourages teen pregnancy and large, dependent-upon-the-government families.
  • States with the highest benefits have the lowest rates of additional births, and the states with the lowest benefits have the highest.
  • “In the median state, which adds $57 in monthly Aid for Families with Dependent Children (AFDC)benefits for an additional child, each newborn brings a minimum $88.50 a month in new expenses, according to estimates by Catholic Charities USA [this means that each additional child costs approximately $30 more a month after any benefit increased are factored in; more children mean less money overall to survive on].
  • Contrary to the myth, AFDC families also are slightly smaller than the U.S. average. The typical AFDC family consists of 2.9 people, according to the Children’s Defense Fund, compared to the average 3.16 nationwide. Some 42 percent of AFDC mothers have just one child, and 30 percent have two kids. Just 10 percent of AFDC families include four or more youngsters.”

MYTH #3: People on welfare live pretty well.
  • Here are the guidelines for TANF (and here are the names TANF may go by in your state, if “TANF” is unfamiliar to you): Be poor, have infant(s) or children under 18, be ready to work (there is no “free ride”), benefits are limited to a total of five years. Be prepared to give up most if not all of your current assets (if any). The government may provide a cheap mobile phone with pre-paid minutes if the TANF recipient is too poor to afford a land-line or mobile phone of his or her own. This is done so the poor person can communicate with potential employers and with the government employees handling his or her files. (Judgmental people will actually covet these “free” phones and make many nasty comments about how “unfair” it is that a person on welfare “has an iPhone”…but do not kid yourself. You know that not one of them would trade places with the poor person, even if they did get a real iPhone out of the deal.) You can not receive TANF if you have no children, if you are unwilling to work, and if you are not destitute.
  • Here are the guidelines for SNAP: Be poor and hungry. You can only buy food, and only specific kinds of approved food items. (No toiletries, like toilet paper or shampoo or soap. No pet food items or baby care items like diapers, or feminine hygiene items like tampons or pads. No “hot” or deli foods, no pre-prepared or frozen foods (in some areas). No tobacco or alcohol.) Average cost per person per meal is about $1.60, if  s/he can qualify for the maximum food stamp benefits available. There are no actual paper scrip / coupon-like “food stamps” anymore; SNAP benefits are distributed via plastic Electronic Bank Transfer (EBT) cards that look a lot like standard debit cards.
  • Here are the guidelines for WIC: Be poor and hungry, have infant(s) or very young child(ren). There are nutrition “classes” available, and the focus is on providing lots of dairy products for small children. Otherwise, WIC has very similar guidelines as SNAP.
  • Find your local “Section 8” low-income housing area. What kind of neighborhood is it in? Is it safe? Would you feel comfortable driving through or walking around the neighborhood at night? Is it attractive and conveniently situated near good schools, public transportation, grocery stores and businesses? Would you want to live there, even for free? Do you still begrudge those folks a “free” apartment? (Did you know that people can wait up to a decade or more to be placed in this housing?)
MYTH #4: Welfare is a huge drain on the federal budget.
  • It’s true that with state and federal expenditures, welfare programs cost a total of $24 billion annually. And yet welfare payments affect only 1 percent of the federal budget.
  • Affluent Americans enjoy far greater benefits in the form of tax deductions for mortgage interest and property taxes, capital gains exclusions, and farm subsidies. The higher the household income, under current tax law, the greater the tax advantages. Mortgage interest, which is excluded from taxation on loans up to $1 million, will cost the federal government $53.5 billion in 1995, according to a House Joint Committee on Taxation report—more than twice the payments to poor families.
  • Families earning $50,000 or more enjoyed 88 percent of the total tax benefit, and families earning more than $100,000 annually collected 44 percent, according to the same report. “People with million-dollar mortgages do not need a federal subsidy,” says Henry Rose, director of the Community Law Center at Loyola University Law School in Chicago. “You can own two homes and benefit from mortgage interest deductions on both. The government is subsidizing you to own two homes. Is that really where we want our taxes to go? Contributions to Social Security decline as a percentage of income for persons earning more than $60,000. Thus, a worker who earns $20,000 pays 6 percent of earnings into Social Security while another person who earns $200,000 contributes only 2 percent.
  • Unlike federal assistance to the poor, government payments to Social Security recipients are adjusted annually to ease the bite of inflation.
  • Via ThinkByNumbers.org: “In 1996, Congress passed a bill enacting limited welfare reform, replacing the Aid to Families with Dependent Children (AFDC) program with the new Temporary Aid to Needy Families (TANF) program. One key aspect of this reform required recipients to engage in job searches, on the job training, community service work, or other constructive behaviors as a condition for receiving aid. [T]he success of this reform was pretty dramatic. Caseloads were cut nearly in half. Once individuals were required to work or undertake constructive activities as a condition of receiving aid they left welfare rapidly. Another surprising result was a drop in the child poverty rate. Employment of single mothers increased substantially and the child poverty rate fell sharply from 20.8 percent in 1995 to 16.3 percent in 2000.”
  • The poor unfairly bear the brunt of our political and economic anger and are without powerful defenders. “The typical reaction I hear is, ‘We’re the taxpayers who carry the weight of society. Why are you critical of our meager benefits?'” Rose says. “I can understand that. But when we talk about replacing the welfare state, let’s at least recognize all the forms of benefits and look at who really needs subsidy.”

We don’t think purely logically when it comes to finding solutions to poverty.

One problem we have to deal with is separating what is financially most logical and feasible with what offends the sensibilities when it comes to helping the disadvantaged, be they welfare recipients or the homeless. Whereas I am not taking a side one way or the other on this particular issue, there are hard numbers which demonstrate that actually giving chronically homeless people a cheap apartment is financially less onerous than dealing with keeping the homeless away from tourists and from hassling passers-by, and with paying for their health problems, ER visits and medical bills.
Cracked‘s Chris Zeigler explains it with a humorous twist: “The homeless will always be with us. No one wants to hire them, and there’s no way society can afford to just give them a place to live. When a dude is sleeping in a box he found in the alleyway and eating rats cooked over a cigarette lighter, it’s sad, but he’s not costing us anything — at most, he costs whatever spare change he collects in his hat every day. But has anyone gone ahead and calculated the actual cost of keeping someone alive and homeless? Someone did! And it’s around a million dollars.

Wait, what?

First of all, as a society we’re not cool with just letting poor people die in the streets. So while we don’t provide housing, we do provide emergency room care. It’s counterintuitive, but this begrudging little bit of help actually winds up costing society way more than if we just went the whole way. Why? Well, it should come as a surprise to nobody that living on the street is kind of unhealthy, and that’s before the depression and its accompanying substance abuse come into play. […] In Washington in 2002, 198 [homeless] individuals generated 9,000 emergency room visits, or a little under one a week. At a minimum of $1,000 a visit, that’s a heck of a medical bill that those hospitals are trying to collect from a homeless person. Unless they have a really good day panhandling, that money is coming out of your pocket.
Add in the annual cost of $24,000 if they take advantage of a shelter, plus the cost of the police to arrest and process those who misbehave (plus the round-the-clock housing, feeding and guarding they get once they’re in jail), and it all adds up to a tidy sum for taxpayers to handle. Experts say it really would be cheaper just to house them and treat them. […] The general public, of course, would never go for this idea, on principle alone. But it turns out principle is expensive as hell.”
Power-law solutions focus exclusively on the numbers and ask what would be the most financially feasible solution: What is the bottom-line? It turns out that the solution to many issues that involve the poor which would cost the least amount of money would inevitably be the least popular solution, because certain people would be outraged that the very poor were “getting a free handout” — probably the same people who are outraged about the not-so-free assistance the poor are begrudged now. The fact is, although these people talk a lot about the costs and “I don’t want my tax dollars spent on that!”, if you showed them that it would actually save them money to be more charitable, even to the “undeserving,” those people would not want to try any proposal that appears to “reward” the struggling in any way.
That is because, deep down, a lot of the fighting over welfare is not about what it costs, but who we perceive it to be helping the most. This is why it behooves certain groups (and politicians especially) to perpetuate the Welfare Queen fable: It’s a modern-day Southern Strategy and, unfortunately, it still resonates with resentful white people in particular.
Power-law solutions, even in all their cold, logical glory and demonstrably improved bottom line, do not stand a chance against deep-seated resentment, especially racially-tinged resentment for The Poors that is perpetuated by politicians who know darn well what they are doing. But lefty liberals don’t like power-law solutions either, because they seem too cold and impersonal. Both sides are dead wrong about rejecting power-law solutions if the goal is really to help the poor while also making the smartest financial decisions.
As The New Yorker says: “”Power-law solutions have little appeal to the right, because they involve special treatment for people who do not deserve special treatment; and they have little appeal to the left, because their emphasis on efficiency over fairness suggests the cold number-crunching of Chicago-school cost-benefit analysis. Even the promise of millions of dollars in savings or cleaner air or better police departments cannot entirely compensate for such discomfort.
In Denver, John Hickenlooper, the city’s enormously popular mayor, has worked on the homelessness issue tirelessly during the past couple of years. He spent more time on the subject in his annual State of the City address this past summer than on any other topic. He gave the speech, with deliberate symbolism, in the city’s downtown Civic Center Park, where homeless people gather every day with their shopping carts and garbage bags. He has gone on local talk radio on many occasions to discuss what the city is doing about the issue. He has commissioned studies to show what a drain on the city’s resources the homeless population has become. But, he says, “there are still people who stop me going into the supermarket and say, ‘I can’t believe you’re going to help those homeless people, those bums.'””
A more recent case where power-law solutions should have been applied was the failed welfare recipient drug testing experiment in Florida. Not only did the testing fail to save taxpayers any welfare money (because the few people who took the test and failed were able to assign other adults to apply for benefits for their families, and those adults passed) but there was no thought to what would happen if a family was denied welfare because the adult applying for benefits was tested and popped positive on a drug screen. One thing that would definitely have happened is that dependent children or elderly family members would be punished due to the irresponsibility of their adult caretaker. Few people mentioned that automatically assuming that welfare applicants would also, naturally, be drug users was insulting, had suspiciously racist undertones, and, as it turns out, was grossly inaccurate (only 2% of the welfare applicants tested positive for drugs, which, when compared to self-reported percentages of up to 9% in the general population as a whole, implies that welfare applicants are actually less likely to do drugs). There was, notably, no discussion about getting those people who tested positive into a rehab or addiction counseling program. There was also no discussion educating the general public that TANF benefits are not “freebies” but part of a “workfare” program.
It was also kept pretty quiet that Governor Rick Scott benefited financially from the drug testing, and that taxpayer money went to line his pocket.
As a result, you had a lot of ignorant people posting things such as “If I have to pee in a cup to work, you have to pee in a cup for workfare assistance.” Translation: Because I was humiliated and had to submit to a probably unnecessary and expensive pee test to get my probably grossly-underpaid crappy job, then you, too, should submit to an arguably unconstitutional procedure so you can participate in a Welfare To Work program which actually does not provide anywhere near a living wage.”
Considering strict profit-law solutions would have nipped the “test the welfare recipients” idea in the bud. The whole debacle wasted far more taxpayer money than it saved in welfare payments.

We must remember there are suffering human beings involved when we discuss welfare.

There is no dearth of anecdotal evidence that details how miserable life on welfare can be. Here’s Cynthia’s story:
From Claretian Publications: “Cynthia Barnett bears no resemblance to the Cadillac-driving “Welfare Queen” that President Ronald Reagan made famous as an example of fraud and excess in programs to aid the poor. […]  Her monthly income consists of $128 in AFDC benefits that she receives for her youngest child, the only one still under 17 years old, and $236 in federal food-stamp assistance.
Barnett aspires to an apartment in “a relatively safe neighborhood,” but has no real hope she will ever make it out of Dearborn Homes, a Chicago public-housing development in one of the poorest, most crime-infested pockets of the nation. “People think we live the life of Reilly, with all the luxuries,” Barnett says. “I don’t have a telephone…color TV…CD player. I sure don’t eat sirloin. When we get our grant at the beginning of the month we go shopping for what’s needed, not what’s wanted. I look for the nicest things at the cheapest prices. I buy a roll of bus tokens for myself and a roll for my daughter. If we run out of tokens, we just don’t go anywhere.”
Barnett wants to work. […] Barnett now volunteers at Women for Economic Security, a program of the Chicago Area Project that offers job and leadership training for women attempting to make it off welfare. As president-elect of Women for Economic Security, one of Barnett’s tasks is educating potential donors about what it’s like to be on welfare.

We should ask why corporations like Wal*Mart get to pay their workers a pittance far below a living wage, forcing taxpayers to subsidize their food and other needs, while Wal*Mart gets tax breaks from the government.

What is it like? AFDC grants and food stamps barely cover the necessities and leave families below the federal poverty line in almost every state. The AFDC grant for a mother and two children in the median state was $366 per month—or $4,392 annually—in January 1994, according to the U.S. Department of Health and Human Services. The same family would qualify for a food stamp allotment of $295 per month, or $3,540 per year. Together, AFDC and SNAP [food stamp] assistance for the family totals $661 per month, and $7,932 per year. That’s just 64 percent of the federal poverty line for a family of three, which stands at a grim $12,320. Just one in five AFDC families receive housing assistance.
Most wearing for families without resources is the fear that disaster is around the corner—sometimes in the form of an unexpected bill that would be insignificant to others.”
There is no “free ride” welfare any more — if there ever really was — and there has not been since the Clinton administration.
“On August 22, 1996 President Bill Clinton signed into law his now infamous Personal Responsibility and Work Opportunity Act thereby “end[ing] welfare as we have come to know it.” The Act replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF).
TANF establishes a lifetime limit of 60 months (5 years) for federal assistance, mandates that single parents participate in work activities for an average of 30 hours per week, and caps federal block grant contributions to states at $16.6 billion per year. (As a result of inflation the real value of the TANF block grant has already fallen by 28%.)
[D]espite few fluctuations in the poverty rate since TANF supplanted AFCD, the participation rate among eligible families has plummeted by 52%  since 1995. Over the same time period—and despite flat to declining crime rates— the U.S. prison and jail population has increased by 44% . Perhaps a quickly expanding prison population is precisely the unspoken foundation upon which “welfare to workfare” rests. We haven’t “ended welfare;” instead we’ve invisiblized it by shifting its beneficiaries from the public square to the prison yard.”

The bottom line is that social assistance programs actually work!

If you are concerned at all about the very poor (unlike Mitt Romney), government safety net programs work.
The Center on Budget and Policy Priorities says: “A Center analysis shows that government safety net programs kept some 25 million people out of poverty in 2010. Without any government income assistance, either from safety net programs or other income supports like Social Security, the poverty rate would have been nearly double in 2010 (28.6 rather than 15.5 percent).” Despite the acknowledged flaws in our social safety net programs, they do work if your definition of success includes “lifting families out of poverty”.
Salon says: “[P]overty fell substantially over the past several decades before rising a bit during the Great Recession. Neither liberals nor conservatives have been eager to embrace this idea—the former to bolster support for new programs and the latter to dismiss the efficacy of what’s already been done. […] The impact of the recession aside, we’re clearly winning the decades-long war on poverty. We’re doing so in part because the economy is evolving in ways that are favorable to the poor, and in part because our government programs are effective. In particular, the not-very-complicated strategy of giving money to the poor through tax credits and Social Security has steadily pushed the poverty rate down over decades, while safety net programs help shelter people from recessions. It’s understandable that advocates like to underscore the severity of social problems. But at a time when many voters seem skeptical about the efficacy of government programs it’s worth saying that these programs work. Long-term investment in anti-poverty spending has done exactly what it is supposed to do.”
Welfare–here, government assistance programs for the impoverished and needy–has never been a major cost to taxpayers in this country. Less than 1% of the average paycheck goes for this non-medical welfare.
Welfare programs are not at the root of our country’s financial problems, and they never really were.
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8 thoughts on “Welfare Programs Are Not The Cause Of America’s Financial Problems

  1. dakrolak says:

    Reblogged this on astound me: and commented:
    What I’m reading this morning…very thought provoking ~

  2. This an amazing article! Bravo! I have long thought this about these programs and this is something I would love to show everyone!

  3. K says:

    This article is very well done and I wish that more people would read this and take it to heart! Another thing that I would add is that (at least in my state although I do not know how it is elsewhere) those who receive money every month also is required to “volunteer” unless they have a medical excuse. Ordinarily that would be ideal- put people to work for money! However, in this case, these people are working for about 2 bucks an hour!

  4. Exhaust Hood says:

    We are a group of volunteers and starting a brand new scheme in our community.

    Your website provided us with helpful information to work on.

    You have done an impressive job and our whole community will be grateful to you.

  5. Aw, this was a really good post. Finding the time and actual effort
    to generate a great article… but what can I say… I put things off a whole lot and don’t manage to get anything done.

  6. Sloppymonkey says:

    As an HHSC empoyee I can not speak of any persons specifically, I will say I have been on both sides of the SNAP counter. However I can add that Texas spends much more on fraud investigations then it recovers in lost assets. Further, SNAP is corporate welfare. Yes! It is a means of purchacing foodgoods, from corporations, distributed by qualifying individuals, that is why Wal Mart screamed the loudest when the austerity movent reduced recipient distributions by 10%. Further, they , WalMart and other low wage proprieters depend on SNAP to supplement their own employees wages. I am well aware of the demographics of snap recipients but more I am made aware of the racial bias of the people screaming foul. I will leave with some tidbits you may not know about Texas SNAP, if you have a felony conviction for drugs after 1996 you are not eligible for snap. You can be a murderer, rapist, child molester or a banker and receive benefits. If you are an ABAWD, that is Able bodied without dependents, and do not work 20 hours per week you are only eligible for 3 months of benefits. Also, TWC requires you to activly search for work 30 hours per week unless you are physically or mentally unfit to, and then you must have a verifyible disability and doctors letter that works out to about $1.60 per hour of looking and if you fail to meet expectations, Benefits are cut, 1st for a month and more for repeat offenders. Can you imagine restrictions like that on your bank that crashed itself gambling on derivitive swaps and was the recipient of the largest corporate bailout venture in US history? 😮

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