Public Welfare: Is it really for our well being?

Informative Article


Public welfare spending is one of the only things in America’s capitalist government that provides benefits to low-income people. The issue? The flaws we haven’t paid attention to in decades are starting to become clear.


by Aashna Chudgar

Every year, the government spends around a trillion dollars on public welfare programs that assist all kinds of economically marginalized people. For a general idea of how much is spent each year and what kinds of things they’re spent on, the 2011 CRS (Congressional Research Service) report states that the United States spent $1.03 trillion on 83 programs. This category exceeded every other expenditure in the government’s budget, including National Security, Medicaid healthcare services, and Social Security. This money goes towards, to name a few programs, HIV/AIDS programs, cancer detection, emergency food assistance and food stamps, Medicare health services, nutrition services, temporary cash aid for families who need it, educational services for children, and foster care and adoption services.


The spending on welfare has always been a controversial subject and many differing opinions exist in terms of how much we should be spending. Some believe that welfare money is not being directed towards people in need and therefore we should enforce a restriction of spending on welfare. Others believe that the government isn’t spending nearly as much on welfare programs as it should and increasing funds is the only way to reach the people of America that need funding.


This leads us to our trilemma: should we decrease spending in order to combat irresponsible spending and more forward as a nation, increase spending so that those who aren’t seen don’t get left behind in an increasingly more expensive world to live in, or simply leave our welfare systems alone? Let’s find out.


The Economist’s Perspective:


Welfare is a very large portion of federal spending, and where does federal funding for welfare come from? Our taxes. Our taxes fund many different programs, the most important ones being TANF, Temporary Assistance to Needy People (cash assistance to families with emergency needs), and SNAP, formerly known as food stamps. Our current presidency calls to, according to Politico, remove tax deductions and loopholes that come with irresponsible welfare spending and overall create a progressive tax cut that will direct welfare spending to a more efficient state. This plan will reduce tax brackets from 7 to 3, meaning taxpayers will pay either 10%, 25%, or 35% in taxes, and the business tax will be reduced to 15%. Cuts on SNAP, ACA (Medicaid), and HUD (the Department of Housing and Urban Development) will lead to around a trillion-dollar cut on all social services, not just welfare, but Medicaid and other humanitarian services.


Many would agree with the statement that welfare spending, especially TANF, has over the years become an incredibly unreliable spending system that does not direct its funds to the correct areas. For one thing, there are no concrete restrictions on what is and isn’t effective spending. According to FiveThirtyEight, “in 2014, about one-third of TANF spending went to “other” areas, up from 12 percent in 1998”. For example, in Georgia, 80% of their funds go to the “other” category, and only 8% go directly to families in cash assistance. On top of that, state spending on welfare has become irregular. Here are some troubling statistics provided by Governing: 24 states used less than half of TANF funding on core activities, which include job, education, and medical opportunities, seven states have used less than 10% on basic needs such as food, shelter, and clothing for families, and five used more than 50% on basic needs. There is, visibly, no stability in spending when it comes to welfare, and restrictions could be in everyone’s favor.


The Humanitarian Perspective:


Of course, with cuts on spending and programs on the way, disastrous consequences could take place. According to CCBP, reduced budgets on welfare prioritize cutting taxes over providing basic assistance. Repealing ACA would result in millions losing access to healthcare, a few million more would experience dramatic increases in healthcare costs, and would overall end pre-existing protections for those who don’t have access to healthcare. Cutting SNAP spending by 30% would take away food choice and access from 90% of its recipients, and four million would lose access to SNAP benefits altogether. 18% of cuts on HUD would severely decrease the quality and accessibility of public housing. Basic maintenance spending would be cut by 60% and would eliminate access to 140,000 public households. Rent for public housing would also increase by 44%, taking away benefits from around four million people.


To combat possible future tax cuts and increasing inflation rates, increasing welfare spending seems to be essential. According to FiveThirtyEight, “in 1996, 68 out of every 100 low-income families received cash assistance nationwide; but by 2014, that fell to 23 out of every 100 such families”. Low-income families are one of the main groups of benefit receivers that are not getting the funding that they need. According to Econofact, “Spending on cash and near-cash transfer programs to low-income families comprises less than 5 percent of the federal budget”. On top of that, according to MisesInstitute, “low-spending states like Washington, Massachusetts, Utah, and Colorado tend to have lower crime rates and higher life expectancy”. Those who do receive benefits from programs like SNAP experience high restrictions. “SNAP eligibility rules are quite restrictive for non-working prime-age (18 to 49 years old) able-bodied adults without dependents (ABAWDs). Most are restricted to three months of benefits within a three-year period if they are not working or in a training program at least 20 hours per week” (Econofact). Without increased spending, programs could continue to only provide benefits to incredibly limited numbers of marginalized people.


The Neutral Perspective:


Although there is a lot of controversy when it comes to maximizing welfare benefits, the current amount of people receiving benefits from welfare is extraordinary. Direct benefits have been provided to 6,665 families. According to BLS, of all families with children under 18 receiving benefits from welfare, 21.8% received housing assistance, 84.1% received access to Medicaid, 7% received public assistance, 51.6% had food stamp benefits that came from SNAP, and 9.9% received an additional SSI (supplemental security income) to stabilize families who needed it. $64,728 was spent by government expenditures to oversee the needs of all families underneath the poverty line. This was spent on the defined categories of food, ensuring food stability at home, access to food away from home, housing, clothing, transportation, healthcare, entertainment, pensions, social security, and other needs. To put this in perspective, 5,603 families received Medicaid benefits, 3,441 received SNAP benefits, 1,450 received housing benefits, 662 received SSI benefits, and 469 received public assistance.


For a more broad sense of benefits that encompass all categories of social spending, including welfare, according to CCPB, a trillion dollars went towards social security requirements and benefits. Another trillion dollars went towards four healthcare programs that are the essential basis of our public healthcare system, which is the ACA (affordable care act), CHIP (children’s health insurance program), Medicare, and Medicaid. 361 billion dollars went towards safety net programs, which are America’s cash assistance funds for families facing the devastation of extreme poverty. This includes SNAP and SSI, as well as taxation benefits like Earned Income Tax Credit and Child Tax Credit, which assist low and moderate-income working families. CCPB has an analysis that uses the Census’ Supplemental Poverty Measure to come up with poverty statistics, and according to this analysis, safety net programs kept 37 million people out of poverty and halved the poverty rate.


Whether we choose to cut funds to reduce governmental welfare irresponsibility, increase spending to reach people in need, or simply continue the way we have for years, we can all agree that the goal we have in mind is maximizing the efficiency of the welfare system to benefit the people of this country.


So what do you think? Which direction is the one leading forward?