News Welfare now 21% of Federal Budget

[Oltz]

According to a new report out of the Senate Budget committee the 83 programs that make up the category of "welfare" spending have grown in spending by 32% since 2008 and now make up 21% of the federal budget in 2011 a larger portion then any other category on its own (defense,SS,Medicare being the 3 other large categories). This is projected to increase for 2012.

http://budget.senate.gov/republican/public/index.cfm/files/serve/?File_id=34919307-6286-47ab-b114-2fd5bcedfeb5

With out eliminating any of the programs entirely how/where do we cut to get this under control?

Or do we choose overlapping programs to eliminate wholesale after all administrative costs must be significant on that number of programs.

Or is this not even a problem in the eyes of some?

Thoughts?

 

[Ryan_m_b]

Just had a flick through the list, are you saying that most of these problems are not worth spending on?

Moreover this question is largely unanswerable unless anyone has had a look at how much money these programs can make. A lot of those programs seem to be education based. It mentions that ten of the projects take up the bulk of the cost but doesn't mention which. The usefulness of this seems curtailed by the lack of further info.

 

[Oltz]

I think they all have merits and were created for good reason but the aggregate is simply to much.

If there are 50 Million people (47 million on food stamps last I saw) and we are spending ~1 trillion dollars it would probably be better to just give them 20,000 a piece and be done.

Forget the programs and all the administration just give 20,000 dollars in refund to the 50 Million lowest income tax returns. That would be roughly 36.5% of tax returns filed.

Now I know more people would need to file but let's say filing goes from 137 million to 200 million still 25% of people would get a 20K check would that solve poverty?
What if they split it up into monthly payments?

I think a trillion dollars a year to help the poor is proof enough that it has not helped the poor stop being poor in the past 30 years we need to do something different.

http://www.irs.gov/uac/Filing-Season-Statistics-for-Week-Ending-June-8,-2012

 

[Hepth]

I don't really see a problem with the numbers. Have you looked at the list? Its quite inclusive. If it were just "Welfare", like your title, as in the cut-a-check to the poor program, then I'd be upset. But this includes, but is not limited to:

Medicaid
Multiple School Food Programs
Pell Grants+Work Study
Teaching Grants
Public Works Development (I assume this is large)
Water and Waste Disposal for Rural Communities
Homeless Assistance
Public Housing
Foster Care Programs
Adoption Programs

A lot of programs that I feel my taxes SHOULD be going toward. While I agree that there might be some fat to trim (probably a lot to be honest) I don't feel that should include CUTTING any programs for no other reason than "21% is a big number".

I'd really love a breakdown of how that "21%" is divided up to these 80+ programs.And why would they lump in "Public Works and Economic Development" #REF.
How is that "welfare" at all? Because you're building public infrastructure for people that can't afford to build their own cities?

I don't know, looking at that list I feel like its money well spent. I agree there should be tighter restrictions on Food Stamps, as frequenting lower-income cities (Flint, MI for undergrad) let me experience an overwhelming abuse of the food stamp program. Nearly evertime I went grocery shopping someone was standing near the register with a bunch of alcohol and tobacco offering to buy my groceries for me if I'd pay them cash (As they couldn't purchase alcohol with their card).

I'm not intimidated by the 21% budget number though, no.

#REF : http://www.federalgrantswire.com/grants-for-public-works-and-economic-development-facilities.html

 

[Hepth]

I think they all have merits and were created for good reason but the aggregate is simply to much.

If there are 50 Million people (47 million on food stamps last I saw) and we are spending ~1 trillion dollars it would probably be better to just give them 20,000 a piece and be done.

http://www.irs.gov/uac/Filing-Season-Statistics-for-Week-Ending-June-8,-2012

Well, 45 million people, and 78 billion was spent on food stamps, that amounts to about $1700 a person, not $20,000.

 

[Oltz]

Well, 45 million people, and 78 billion was spent on food stamps, that amounts to about $1700 a person, not $20,000.

I realize Hepth that the entire amount was not food stamps I used the number of people on food stamps as a starting point for a number of people who our government considers in need of aid.

Where do you see that food stamps was only 78 Billion by the way and for what year?

So a trillion dollars a year in aid to the poor is appropriate that's fine if you feel that I just wonder if maybe there was a better way of helping the poor since we have been trying this method for a while now and it is only seeming to get worse. IMO

 

[Hepth]

I realize Hepth that the entire amount was not food stamps I used the number of people on food stamps as a starting point for a number of people who our government considers in need of aid.

Where do you see that food stamps was only 78 Billion by the way and for what year?

So a trillion dollars a year in aid to the poor is appropriate that's fine if you feel that I just wonder if maybe there was a better way of helping the poor since we have been trying this method for a while now and it is only seeming to get worse. IMO

It was from an latimes article
http://articles.latimes.com/2012/jun/20/nation/la-na-food-stamps-20120620

An estimated 45 million Americans received food stamps in 2011 — more than ever, at a cost of $78 billion. That was a sizable increase from 2007, when 26 million Americans received food assistance at a cost of $30 billion, according to the nonpartisan Congressional Budget Office.

Remember that report includes a lot of stuff, not just things that directly help the poor. I mean, I don't consider Foster Care/Adpotion Programs as "Welfare for the Poor" but rather "Welfare for the People". I guess if you consider a Foster Child as "Poor" in that he can't pay a family out of his own pocket to take care of him, then ok.

I don't see it as "a trillion dollars a year in aid to the poor". Like I said, I feel it would be more beneficial to see a real breakdown and judge each program on their own merits. Otherwise this "21%/trillion" will be misinterpreted as a trillion on food stamps, or a trillion on "welfare", etc.

 

[Travis_King]

Could you imagine the social backlash that would arise if it was proposed that the government spend 1 trillion dollars in giving the unemployed and poor $20,000 each?

Holy cow...

 

[Oltz]

I agree I would love to see a true break down of at least the 20 largest programs

I just found a great website I had never been to before that has state by state data about poverty and some of the programs in question.

Monthly food stamp payments
http://www.irs.gov/uac/Filing-Season-Statistics-for-Week-Ending-June-8,-2012

Distribution of population relative the the Federal Poverty Limit (subjective as its based on income and not international standard of living)

http://www.statehealthfacts.org/comparebar.jsp?ind=9&cat=1

So 28% of the population are below 138% of the FPL and 52% of the population make 2.5 times the FPL or more.

Sounds like 52% should pay some tax 28% should get some support and the middle 20% get left alone.

 

[ParticleGrl]

You want people off welfare, get employment back up. The whole point of welfare is to kick in when times are hard! Its not that the programs have exploded, its that economic conditions have been awful so more people need a bit of help to get by.

 

[D H]

Sounds like 52% should pay some tax 28% should get some support and the middle 20% get left alone.

Most of them pay some tax.

Some just don't pay income tax. They still have payroll taxes, state and local sales taxes, gasoline taxes, property taxes (directly if they own their house, indirectly if they rent), ...

 

[Oltz]

We are told the recession ended in 2009 by the President do you mean to imply you do not believe him?

30% growth since 2008 is a bit extreme even during the down times we have.

Its not that I want people off of welfare I want us to find a better way of helping people that actually helps them there are very few problems that are solved by throwing money at them. We have tried that approach we need to tweak it and move forward.

We can not sustain a budget that has this large of an outlay with limited success when Social security is fast approaching a collapse point with only 2.8 (2010)workers paying in per recipient. A government that is borrowing $0.40 for every dollar it spends and maintain the roles government exists for infrastructure defense and foreign relations. Something has to give or everything has to give something.

I don't know the answers just trying to have a conversation.

 

[Pythagorean]

Its not that I want people off of welfare I want us to find a better way of helping people that actually helps them there are very few problems that are solved by throwing money at them. We have tried that approach we need to tweak it and move forward.

Well, we could do things like require attendance to good educational or vocational programs. Also, make sure parents take care of their children right (those first couple years are pretty important and even well-intented parents can "do it wrong" if they're not informed).

But then we're starting to take away rights... so the right will have to concede to either losing rights so that we can enforce proper practices of prevention.. or providing welfare for people who were free to not practice prevention. The possibility of just letting them die because they didn't prepare is off the table (Aesop's Grasshopper and Ants).

There's surely more creative/inventive alternatives, but that requires seed money to investigate. Like an incentives-based program that would essentially mix the two. But you're still going to have people cheating the system or opting out. There's always going to be the war between regulations and regulation-hacking.

 

[turbo]

You want people off welfare, get employment back up. The whole point of welfare is to kick in when times are hard! Its not that the programs have exploded, its that economic conditions have been awful so more people need a bit of help to get by.

So true. The people who need help now are often hard-working folks who lost their jobs in the recession or in its aftermath. Get them back to work, and they won't need the extra help. To the contrary, they will be paying income taxes, payroll taxes, etc, and increasing government revenue.

 

[D H]

We are told the recession ended in 2009 by the President do you mean to imply you do not believe him

Oh please. That's bordering on trolling.

It's the National Bureau of Economic Research, not the President, that decides when a business cycle starts and ends. Good thing, that. If Presidents had their druthers there wouldn't be recessions. Or at least they wouldn't be called that.

So what's a recession? Per the NBER, (http://www.nber.org/cycles.html)

Contractions (recessions) start at the peak of a business cycle and end at the trough.​

The onset of a recession doesn't necessarily mean the sky has fallen. Recessions start at the peak of a business cycle. Things can still be pretty sweet economically after a recession begins, particularly if the peak was high and the decline is small. Similarly, the end of a recession doesn't necessarily mean that everything has suddenly flipped from gloomy to rosy. Recessions end at the trough of a business cycle. Things can still be pretty gloomy economically after a recession ends, particularly if the trough was low and the increase is small.

In the case of our most recent recession, the decline that marked the onset was huge. The sky came pretty close to falling. The increase that marked the end of the recession has been positive but tiny. Yes, the recession is over, but things are still down.

Another factor is how the NBER defines a recession. They look primarily at gross domestic product and gross domestic income. Poverty can still be on the rise when a recession is decreed to be over. Poverty has in fact continued to rise since the end of the recession. It was 13.2% in 2008, 14.3% in 2009, 15.1% in 2010, and is expected to be around 15.7% for 2011 (those numbers are supposed to come out shortly).

 

[Oltz]

Your right D_H I apologize

 

[Mentalist]

What about subsidies?

 

[mathwonk]

does the rebate of half his tax burden to romney (less than 15% as opposed to 30% for many poorer people) count as "welfare"? i just need to know the definitions of the words.

 

[russ_watters]

"Rebate"? "Tax burden"? Does the government send Romney a big check? Is it written somewhere that Romney has a tax burden of 30%? Let's start with the meaning of those words. I think it informs to where you're going with application of the word "welfare"...

Have you checked a dictionary or wikipedia for definitions of these words?

 

[chemisttree]

I would prefer that the term "entitlement programs" were used rather than "welfare".

The problem is much worse than just a bump up to 21%, though. If we look at all entitlement programs such as Social Security, Medicare, Medicaid, TARP and all other mandatory entitlement programs and interest payments, the cost exceeds total reciepts for the Federal Government.

If we keep just these programs, (forget about Obamacare!) we run a deficit! If we tried to run our government in a pay as you go fashion, we have nothing left for Defense, government employees, DEA, DOE, National Parks, Education, highways, FAA, NASA, or ANYTHING considered discretionary.

You can read this for yourself in the 2013 Whitehouse budget. http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/tables.pdf

The Outlays in the budget are summarized in Table S-5. It's broken down into three categories: 1) Discretionary Programs, 2) Mandatory Programs and 3) Interest. Using data from the most recent reporting year, 2012, the total of 2) and 3) are $2.477 trillion dollars. In the same table, Total Reciepts from all sources is $2.469 trillion dollars. Applying these reciepts to just our interest and mandatory entitlement programs leaves us with a deficit of $8 billion. No money for anything else... including Obamacare!

 

[ParticleGrl]

The problem is much worse than just a bump up to 21%, though. If we look at all entitlement programs such as Social Security, Medicare, Medicaid, TARP and all other mandatory entitlement programs and interest payments, the cost exceeds total reciepts for the Federal Government.

If we keep just these programs, (forget about Obamacare!) we run a deficit!

Two things- 1. as I said earlier in the thread the best way to reduce expenditures and increase revenue is to get people back to work. You can't make long term predictions from near the trough of a business cycle- we have a lot of automatic counter-cyclical programs.

Business cycles have massive effects on the budget- remember that during the previous big boom (late Clinton) people were worried we'd pay back the debt too quickly!

2. The whole point of 'Obamacare' is to bend the healthcare cost curve. It does this in a variety of ways (phasing out incentives for employer provided healthcare, setting up market-based insurance exchanges, effectiveness research,etc), but long-term it means using the previous baseline for medicare is clearly not the right way to make any kind of forecast. It seems strange to 'forget about Obamacare' when it directly addresses your concern about the huge cost of medicare.

 

[chemisttree]

Two things- 1. as I said earlier in the thread the best way to reduce expenditures and increase revenue is to get people back to work. You can't make long term predictions from near the trough of a business cycle- we have a lot of automatic counter-cyclical programs.

You think the 7.8% (not counting California) unemployed can increase revenue and reduce expenditures to the point where total receipts will exceed entitlements in the coming years? Remember, reducing the unemployment rate to 4-5% would be considered a job well-done. That means only 2.8% to 3.8% lowering of the unemployment rate will do all that? I'd love to see that analysis.

2. The whole point of 'Obamacare' is to bend the healthcare cost curve.

No it isn't. The point was to provide healthcare to people who couldn't afford it. Obama lied when he said in 2010 that this bill would 'bend the cost curve' and start reducing health care costs. Numerous analyses since that summer have shown the cost of the bill skyrocketing. The CBO analysis of costs of this health care law have steadily increased and they will very likely increase substantially in the future.

It does this in a variety of ways (phasing out incentives for employer provided healthcare, setting up market-based insurance exchanges, effectiveness research,etc), but long-term it means using the previous baseline for medicare is clearly not the right way to make any kind of forecast.

Right. But who is? Future analyses must include the various costs of the health care plan which have been going up.
Here are the forcast numbers from the Whitehouse Budget for Medicare.

Amount
Year (millions)
2011 480
2012 478
2013 523
2014 551
2015 569
2016 619
2017 633
2018 654
2019 716
2020 767
2021 822
2022 908

Seems to be a smooth, monotonically increasing curve.

It seems strange to 'forget about Obamacare' when it directly addresses your concern about the huge cost of medicare.

Only two years since the passage of the bill and all of the hoped for savings have virtually vanished. CBO has already weighed in on the matter. Next year they will have another go at it but I'm sure we'll see costs rise, benefits shrink and greater negative impact on the budget.

 

[ParticleGrl]

You think the 7.8% (not counting California) unemployed can increase revenue and reduce expenditures to the point where total receipts will exceed entitlements in the coming years? I'd love to see that analysis.

I didn't say that I think it would wipe out the entire deficit- I suggested it would be significantly lower than 2011 and 2012 numbers would predict. It was only a bit more than a decade ago when people were campaigning on what to do with budget surplus.

In general, I'm deeply skeptical of long-term budget forecasts, especially ones built during obviously 'special' circumstances. No one in 2007 saw 2008 coming. Do you really think you can predict where technology will be in 2020? If you can't, then your long term forecast is essentially worthless.

The point was to provide healthcare to people who couldn't afford it.

Thats one small portion of a huge law. Most of the fundamental reforms are about addressing cost. Otherwise they would have just done a large medicaid expansion.

The CBO analysis of costs of this health care law have steadily increased and they will very likely increase substantially in the future.

You've phrased this in a very misleading way. The CBO analysis of the SAVINGS from this health care law have decreased. Its still projected to be a net deficit reducer, even according to your link. But as I'll suggest below- we should doubt those projections.

Right. But who is?

Pretty much everyone. The CBO can't factor in whether things like effectiveness will be effective, and so they don't try. This isn't a strike against them- no one can. The forecasts have to be built around today's baseline.

Right now, most of our healthcare is based around employer based coverage- one of the goal's of Obamacare is to slowly shift us to a system where people buy individual coverage on an exchange. No one really knows how much this will effect costs- some people think 'harnessing the market' is likely to work miracles, I'm more skeptical.

Similarly, collecting data from electronic medical records to push effectiveness research could be a very powerful way to create cost effective care. I personally think this can accomplish tremendous cost reductions, but my training is a scientist so I always think the scientific approach to a problem is best. Others are more skeptical.

The issue is- the CBO has no way of scoring how these sorts of moves will turn out- no one does. They can't score the potential gains from competition on individual exchanges, and they can't score the potential gains from scientific effectiveness studies. So instead, they make loose estimates from today's baselines. Which is fine for 1 or 2 years, but there is no way its accurate much beyond that.

But anyone who looks at it should understand that Obamacare is a big change in healthcare- it is going to do SOMETHING to costs, and they only real approach is to 1. doubt our current projections 2. wait and see what happens.

 

[chemisttree]

I didn't say that I think it would wipe out the entire deficit- I suggested it would be significantly lower than 2011 and 2012 numbers would predict. It was only a bit more than a decade ago when people were campaigning on what to do with budget surplus.

Words like 'significantly' are meaningless. You said the best way to reduce expenditures and increase revenue was to get people back to work. I'll ask again, do you really believe that reducing the unemployment rate by a few percentage points will 'significantly' reduce expenditures and increase revenue?
And, only a bit more than a decade ago, when people were campaigning on what to do with budget surplus, Social Security outlays were just over $409 billion and Medicare was $197 billion. Today those numbers are $773 billion and $480 billion. Together that represents an increase of about 100%. You can't look to the past for answers to this dilemma.

In general, I'm deeply skeptical of long-term budget forecasts, especially ones built during obviously 'special' circumstances. No one in 2007 saw 2008 coming. Do you really think you can predict where technology will be in 2020? If you can't, then your long term forecast is essentially worthless.

I share your skepticism about long term forcasts. I think the CBO has completely missed the mark in it's estimate of future health costs. Health costs which have gone up, up, up. Isn't "technology" wonderful? And, I haven't forecast anything. I'm quoting the Whitehouse and the CBO.

Thats one small portion of a huge law. Most of the fundamental reforms are about addressing cost. Otherwise they would have just done a large medicaid expansion.

Aside from the CHIP program, states determine medicaid eligiblity, not the Federal Government. Changing eligibility to cover more people is the primary purpose of the legislation. All the reforms are supposed to lower the cost of healthcare but as we see it isn't working that way.

You've phrased this in a very misleading way. The CBO analysis of the SAVINGS from this health care law have decreased. Its still projected to be a net deficit reducer, even according to your link. But as I'll suggest below- we should doubt those projections.

If costs go up, and they certainly are and will in the future, the savings from this healthcare law will decrease to the point where it is a net deficit item. My comment was related to that part of the budget that this healthcare law DOES NOT ADDRESS. Cost growth. It wasn't misleading, it was my main point! The latest CBO analysis front loads the savings because in 2011 there are NO OUTLAYS in the programs to offset the revenue gains. It won't be until 2014, when the first outlays are projected to kick in, that we will get the first real analysis of the 10-year cost of the program. It must necessarily be a higher total cost program at that time.

Pretty much everyone. The CBO can't factor in whether things like effectiveness will be effective, and so they don't try. This isn't a strike against them- no one can. The forecasts have to be built around today's baseline.

You mean the Medicare baseline that you earlier said shouldn't be used as a baseline for forecasts?

Right now, most of our healthcare is based around employer based coverage- one of the goal's of Obamacare is to slowly shift us to a system where people buy individual coverage on an exchange. No one really knows how much this will effect costs- some people think 'harnessing the market' is likely to work miracles, I'm more skeptical.

I agree. I don't see how it will be cheaper either.

But let's stop talking specifically about Obamacare and return to the analysis kindly provided us by the Whitehouse showing that entitlements currently cost more than total revenues.

 

[mheslep]

Y
Here are the forecast numbers from the Whitehouse Budget for Medicare.

Amount
Year (millions)
2011 480
2012 478
2013 523
...

That Medicare spending is in the *billions*, which I'm sure you know chem. Sorry to be pedantic but Medicare ( and Medicaid) is the big slice of pie.

 

[mheslep]

Unemployment reduction must have an immediate and direct impact on spending (2012):

-unemployment compensation: $109B

and a lesser impact on

-food and nutritional asst: $113B
-housing asst: $60B
-'other' income security (not social security): $161B

And of course there would be the increased tax revenue.

 

[ParticleGrl]

Unemployment reduction must have an immediate and direct impact on spending (2012):

-unemployment compensation: $109B

and a lesser impact on

-food and nutritional asst: $113B
-housing asst: $60B
-'other' income security (not social security): $161B

And of course there would be the increased tax revenue.

We can estimate how much raised revenue- pushing back toward full employment would necessarily close the 5+% output gap, which should potentially raise revenue by a similar amount.

 

[mheslep]

We can estimate how much raised revenue- pushing back toward full employment would necessarily close the 5+% output gap, which should potentially raise revenue by a similar amount.

And would still leave the budget, other spending left otherwise unrestrained, far, far short of balance.

 

[chemisttree]

That Medicare spending is in the *billions*, which I'm sure you know chem. Sorry to be pedantic but Medicare ( and Medicaid) is the big slice of pie.

Good catch.

 

[Pythagorean]

So what's the pie chart look like for how much each of these programs take and what do people propose cutting?

My understanding is that most of the "welfare" is Medicaid and CHIP.

 

[Pythagorean]

April 14, 2011:

The U.S. Department of Health and Human Services (HHS) today announced four initiatives to give states more flexibility to adopt innovative new practices and provide better, more coordinated care for people with Medicaid and Medicare while helping reduce costs for states and families. The initiatives support the Obama administration’s work to make Medicaid more flexible and efficient and to address long-term cost growth. Several of the announcements also help implement provisions of the Affordable Care Act. Today HHS announced:

Fifteen states will receive federal funding to develop better ways to coordinate care for people with Medicare and Medicaid coverage, also known as dual eligibles, who often have complex and costly health care needs.

All states will receive increased flexibility to provide home and community-based services for more people living with disabilities.
All states are eligible to receive more money to develop simpler and more efficient information technology (IT) systems to modernize Medicaid enrollment.
A proposal by the state of New Jersey for flexibility to expand health coverage for nearly 70,000 low-income residents has been approved.

http://www.hhs.gov/news/press/2011pres/04/20110414a.html

 

[mheslep]

So what's the pie chart look like for how much each of these programs take and what do people propose cutting?

My understanding is that most of the "welfare" is Medicaid and CHIP.

http://www.usgovernmentspending.com/piechart_2013_US_fed

 

[Pythagorean]

http://www.usgovernmentspending.com/piechart_2013_US_fed

I meant a pie chart for welfare spending that broke up the OP's collection of "welfare" spending into it's major components, excluding non-welfare spending. Also, the chart above differs from the OP in that it separates healthcare from welfare.

 

[mheslep]

I meant a pie chart for welfare spending that broke up the OP's collection of "welfare" spending into it's major components, excluding non-welfare spending. Also, the chart above differs from the OP in that it separates healthcare from welfare...

Breakdown from the site I linked. You can drill down further.
[–] Welfare 422.3
[+] Family and children 111.7
[+] Unemployment 77.4
[+] Unemployment trust 0.0
[+] Workers compensation 7.4
[+] Housing 57.0
[+] Social exclusion n.e.c. 168.7
[+] R&D Social protection 0.0
[+] Social protection n.e.c.

[–] Health Care 916.1
[+] Medical service (Seniors) 530.2
[+] Medical service 0.0
[+] Public health services 4.6
[+] R&D Health 32.1
[+] Health n.e.c. 0.0
[+] Vendor Payments (Welfare) 349.1

http://www.usgovernmentspending.com/year_spending_2013USbf_13bs1n_4010#usgs302

 

[SixNein]

According to a new report out of the Senate Budget committee the 83 programs that make up the category of "welfare" spending have grown in spending by 32% since 2008 and now make up 21% of the federal budget in 2011 a larger portion then any other category on its own (defense,SS,Medicare being the 3 other large categories). This is projected to increase for 2012.

http://budget.senate.gov/republican/public/index.cfm/files/serve/?File_id=34919307-6286-47ab-b114-2fd5bcedfeb5

With out eliminating any of the programs entirely how/where do we cut to get this under control?

Or do we choose overlapping programs to eliminate wholesale after all administrative costs must be significant on that number of programs.

Or is this not even a problem in the eyes of some?

Thoughts?

Welfare, as it's normally defined (the welfare check), refers to the federal program called TANF or "Temporary Assistance to Needy Families.". And spending on it has been decreasing for over a decade. We currently spend about 16.5 billion on it per year.

http://www.cbpp.org/images/cms/7-24-12tanf-box.jpg Welfare, as been re-defined here, is more about providing general welfare to the public. And the entire federal budget should be included in such a definition.

So my thought: Republicans are manufacturing a talking point to use in elections. It's untrue, but truth doesn't really matter.

 

[Pythagorean]

I think I figured out the problem. We've extended human lifetime. And.. baby boomers.

Healthcare: 916

Major Hitters for Healthcare:

Medical Service for Seniors - 530
Grants to States for Medicaid - 282

Welfare: 422

Major Hitters for Welfare:

Supplemental Nutrition Assistance Program - 76
Unemployment - 77
Supplemental Security Income Program - 54
Payment Where Earned Income Credit Exceeds Liability for Tax - 52
Housing - 57

 

[russ_watters]

Welfare, as it's normally defined (the welfare check), refers to the federal program called TANF or "Temporary Assistance to Needy Families."...

Welfare, as been re-defined here, is more about providing general welfare to the public. And the entire federal budget should be included in such a definition.

So my thought: Republicans are manufacturing a talking point to use in elections. It's untrue, but truth doesn't really matter.

Does anyone ever check definitions? It was just yesterday that I suggested it might be a good idea:

3. financial or other assistance to an individual or family from a city, state, or national government: Thousands of jobless people in this city would starve if it weren't for welfare.
4. ( initial capital letter ) Informal . a governmental agency that provides funds and aid to people in need, especially those unable to work.

http://dictionary.reference.com/browse/welfare

Welfare is the provision of a minimal level of wellbeing and social support for all citizens. In most developed countries, welfare is largely provided by the government, in addition to charities, informal social groups, religious groups, and inter-governmental organizations. In the end, this term replaces "charity" as it was known for thousands of years, being the voluntary act of providing for those who temporarily or permanently could not.

[and for the US:]
In a 2011 op-ed in Forbes, Peter Ferrara stated that, "The best estimate of the cost of the 185 federal means tested Welfare programs for 2010 for the federal government alone is nearly $700 billion

http://en.wikipedia.org/wiki/Welfare

The US program labeled "welfare" is not the only program that fits the definition and that's not a conservative conspiracy to broaden the definition. That's shoe's generally on the other foot around here.

Programs like food stamps exist because it is better to earmark the money for specific purposes related to standard of living, rather than just handing the poor a big bag of cash. The so titled "Welfare" program is just left-over, miscellaneous bag of cash we hand the poor that isn't earmarked for specific standard of living use.

 

[russ_watters]

I think I figured out the problem. We've extended human lifetime.

That's a problem? I thought it was a goal and a good thing?

Why were these programs set up like pyramid schemes that relied on a broad base of payers to fund those getting the money out if the goal has always been to extend lifespans and we'd been succeeding? Didn't our benevolent President FDR know this when he handed us this ticking time bomb?

 

[Pythagorean]

That's a problem? I thought it was a goal and a good thing?

Why were these programs set up like pyramid schemes that relied on a broad base of payers to fund those getting the money out if the goal has always been to extend lifespans and we'd been succeeding? Didn't our benevolent President FDR know this when he handed us this ticking time bomb?

Why do you call FDR benevolent?

The baby boom had just started when FDR died. There's actually a hump in the birth rate from 1940 to 1965, it wasn't business as usual; the rate of increase increased. And the rate of increase has since decreased dramatically. And now we're currently seeing the baby boomers get into retirement and programs like... Medical Service for Seniors.

But I wasn't seriously proposing reducing human life.

 

[russ_watters]

The crack about FDR was sarcasm. FDR is viewed as one of our best Presidents by liberals and one of our worst by conservatives. I'm a conservative.

The Baby Boom is just a diversion. It doesn't change the fact that these programs, as designed, had a trajectory toward insolvency. The Baby Boom just changes the slope of the trajectory a little. Though I would debate that it hurt: if anything, in a wider view, the Baby Boom helped, since the "boom" is inverted. The Baby Boom was preceded by a steep drop in births.

Anyway, I am not a person who would be OK with the program (or any program) failing as long as I'm already dead when it happens, and it seems to me that that's a lot of the motivation for fighting against changes in these programs. But even the 'it won't be bankrupt until at least 2035 and even then there will still be some money to pay' argument is flawed, to me. In my view, the programs failed decades ago and people just haven't accepted it yet. Why?

Because as a sort of forced-savings retirement program, your money should be growing*. You should be getting back a lot more money than you put in. It used to be that way, but it isn't anymore. Most people won't be getting back what they paid in and that is a net loss versus a real retirement plan and old-age healthcare savings fund. Our failure to deal with this problem is damaging our retiree standard of living.

*Calculations I've done on my own retirement show that assuming 3% annual pay raises and 5% investment growth (both after inflation), after 30 years of investing you should have roughly 3x as much money as you've invested. If after you retire the money grows at 3% (due to more cautious investing) and you live another 25 years, it should grow another 1x over what you put in. So overall, a relatively conservative strategy should net you 4x what you paid in. Instead, I'll be getting less than 1x. Given the 15% witholding for SS and Medicare (including the employer portion) and projecting over a reasonably successfull engineer's career, these poorly conceived programs are going to drain millions of dollars from my retirement.

This is not greed talking. These millions of dollars that I could have had are not going to help the needy. They are being wasted on propping up flawed programs. If the programs had been designed better, we would all be getting more back.

 

[Oltz]

Well said Russ I concur.

 

[ParticleGrl]

and 5% investment growth (both after inflation)

Are you really sure you are going to find 5% after-inflation investment growth? Due to my youth, I largely missed the 90s boom, and over the last decade I'm averaging a bit over 3% BEFORE inflation and I'm invested in broad index funds, so I'm pretty sure I'm matching the market. I hope we come roaring back, but most estimates are another decade to full employment, which means further low growth.

What happens if the timing of your retirement and a massive financial crash happen to coincide? I have family members who were counting on their 401ks and on downsizing their home in retirement in order to live comfortably. Unfortunately, the crash was badly timed for them and they ended up seeing most of their nest egg wiped out, and the low interest rates now mean they've had to dip into their savings faster than they thought. They now rely at least partially on their social security and are glad they have it.

 

[mheslep]

...

The Baby Boom is just a diversion. It doesn't change the fact that these programs, as designed, had a trajectory toward insolvency. The Baby Boom just changes the slope of the trajectory a little. Though I would debate that it hurt: if anything, in a wider view, the Baby Boom helped, since the "boom" is inverted. ...

Exactly. These kind of increases in benefits per head

would have crashed the system long ago without the large simultaneous increase in tax paying labor force brought about the baby boom.

 

[mheslep]

The general rule on investment, as I've understood it, is that as retirement approaches one moves into bonds or similarly stable securities, so that a ten or 15 year reversal in otherwise strong growth stocks is avoided. Staying in stocks is a decision to gamble on postponing retirement should the downturn take place.

 

[Pythagorean]

The crack about FDR was sarcasm. FDR is viewed as one of our best Presidents by liberals and one of our worst by conservatives. I'm a conservative.

The Baby Boom is just a diversion. It doesn't change the fact that these programs, as designed, had a trajectory toward insolvency. The Baby Boom just changes the slope of the trajectory a little. Though I would debate that it hurt: if anything, in a wider view, the Baby Boom helped, since the "boom" is inverted. The Baby Boom was preceded by a steep drop in births.

Anyway, I am not a person who would be OK with the program (or any program) failing as long as I'm already dead when it happens, and it seems to me that that's a lot of the motivation for fighting against changes in these programs. But even the 'it won't be bankrupt until at least 2035 and even then there will still be some money to pay' argument is flawed, to me. In my view, the programs failed decades ago and people just haven't accepted it yet. Why?

Because as a sort of forced-savings retirement program, your money should be growing*. You should be getting back a lot more money than you put in. It used to be that way, but it isn't anymore. Most people won't be getting back what they paid in and that is a net loss versus a real retirement plan and old-age healthcare savings fund. Our failure to deal with this problem is damaging our retiree standard of living.

*Calculations I've done on my own retirement show that assuming 3% annual pay raises and 5% investment growth (both after inflation), after 30 years of investing you should have roughly 3x as much money as you've invested. If after you retire the money grows at 3% (due to more cautious investing) and you live another 25 years, it should grow another 1x over what you put in. So overall, a relatively conservative strategy should net you 4x what you paid in. Instead, I'll be getting less than 1x. Given the 15% witholding for SS and Medicare (including the employer portion) and projecting over a reasonably successfull engineer's career, these poorly conceived programs are going to drain millions of dollars from my retirement.

This is not greed talking. These millions of dollars that I could have had are not going to help the needy. They are being wasted on propping up flawed programs. If the programs had been designed better, we would all be getting more back.

conservative/liberal/sarcasm... these things don't contribute much to the discussion.

Social factors are amongst some of the more chaotic, especially in economic systems. I don't see how you can separate two idealized trajectories (new deal vs. baby-boomers) in a nonlinear system, it's not like superposition and zero-sum applies. There is damping/sources, amplification, feedback, etc. Certainly a population injection can cause breakdowns and crises where saturation occurs. If everything were linear, you could predict out to infinity.

I'm not arguing that FDR did "the right thing", but I especially doubt anyone on the ground in 2012 can appreciate all the intersecting factors presented to the administration at the time. Anyway, since we can't go back in time, complaining about the past isn't really part of the solution.

So we know that the biggest single spending item in welfare is medical services for old people. Cutting all spending on food stamps would be a meager contribution compared to cutting senior medical spending in half (for instance, not for argument).

The general rule on investment, as I've understood it, is that as retirement approaches one moves into bonds or similarly stable securities, so that a ten or 15 year reversal in otherwise strong growth stocks is avoided. Staying in stocks is a decision to gamble on postponing retirement should the downturn take place.

That's what my financial adviser says. Take more risks when you are younger. The more time you throw the die, the better your chance of winning. You have time to get over the losses and throw the die again when you're young. As long as you keep your risks to a manageable level, it generally pays off.

 

[Pythagorean]

Exactly. These kind of increases in benefits per head

would have crashed the system long ago without the large simultaneous increase in tax paying labor force brought about the baby boom.

How do we know the raising pensions aren't a result of the population boom requiring more services? What sectors of government made up the pensions? We need another pie chart.

 

[SixNein]

Does anyone ever check definitions? It was just yesterday that I suggested it might be a good idea:
http://dictionary.reference.com/browse/welfare http://en.wikipedia.org/wiki/Welfare

The US program labeled "welfare" is not the only program that fits the definition and that's not a conservative conspiracy to broaden the definition. That's shoe's generally on the other foot around here.

Programs like food stamps exist because it is better to earmark the money for specific purposes related to standard of living, rather than just handing the poor a big bag of cash. The so titled "Welfare" program is just left-over, miscellaneous bag of cash we hand the poor that isn't earmarked for specific standard of living use.

There is a difference between general welfare and welfare the program.

The talking point conservatives are shooting for is confusing one with the other. So they lumped a great deal of different things together and called them "welfare."

For example, the child tax credit can be fully claimed for up 110,000 dollar income. Median household income is much less then 110,000 dollars.

According to republicans, this is "welfare."

 

[russ_watters]

Are you really sure you are going to find 5% after-inflation investment growth? Due to my youth, I largely missed the 90s boom, and over the last decade I'm averaging a bit over 3% BEFORE inflation and I'm invested in broad index funds, so I'm pretty sure I'm matching the market.

You just missed a boom and therefore have invested in a period when growth is below average. But the lifetime average of the stock market is roughly 8% after inflation, so I wouldn't expect that trend to continue. Planning for 5% is conservative.

 

[russ_watters]

conservative/liberal/sarcasm... these things don't contribute much to the discussion.

Agreed, but I didn't find it to be worth pointing that out when you did it.

Social factors are amongst some of the more chaotic, especially in economic systems. I don't see how you can separate two idealized trajectories (new deal vs. baby-boomers) in a nonlinear system, it's not like superposition and zero-sum applies.

Again, none of that is relevant. Regardless of the exact shape of the trajectory, the point is the trajectory was always downward.

I'm not arguing that FDR did "the right thing", but I especially doubt anyone on the ground in 2012 can appreciate all the intersecting factors presented to the administration at the time. Anyway, since we can't go back in time, complaining about the past isn't really part of the solution.

No, but acknowledging what the flaws are is critical for correcting them. But unfortunately, few people acknowledge the worst flaw -- the one that means the programs have already failed. That they are already causing financial hardship.

 

[russ_watters]

There is a difference between general welfare and welfare the program.

Programs, yes. The difference is on which side of the poverty line the programs fall.

The talking point conservatives are shooting for is confusing one with the other. So they lumped a great deal of different things together and called them "welfare."

For example, the child tax credit can be fully claimed for up 110,000 dollar income. Median household income is much less then 110,000 dollars.

According to republicans, this is "welfare."

Please provide a source for the claim in your last sentence.

And regardless of that, you still have the shoe on the wrong foot here. You're claiming that conservatives abuse the definition of "welfare", when all we know for sure that at least one liberal does: you did. But even if you can show that some conservative somewhere abused the definition, that person isn't posting in this thread, so you're castigating no one. More to the point, the existence of that person abusing the definition in one direction still wouldn't make it ok for you to abuse it in the other.

At this point, I would appreciate it if you would explicitly acknowledge your error and what the definition actually says/applies instead of continuing to weasel around it. I'm referring to this:

Welfare, as it's normally defined (the welfare check), refers to the federal program called TANF or "Temporary Assistance to Needy Families.". And spending on it has been decreasing for over a decade. We currently spend about 16.5 billion on it per year.

Welfare, as been re-defined here, is more about providing general welfare to the public. And the entire federal budget should be included in such a definition.

All of that is wrong or at least mis-applied. The links I posted and the links others posted are correct: "Welfare programs" are more than just "the Welfare program".