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News Welfare now 21% of Federal Budget

  1. Oct 18, 2012 #1
    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.


    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?

    Last edited by a moderator: Oct 18, 2012
  2. jcsd
  3. Oct 18, 2012 #2


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    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.
  4. Oct 18, 2012 #3
    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 lets 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.

  5. Oct 18, 2012 #4


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    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:

    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
  6. Oct 18, 2012 #5


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    Well, 45 million people, and 78 billion was spent on food stamps, that amounts to about $1700 a person, not $20,000.
  7. Oct 18, 2012 #6
    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
  8. Oct 18, 2012 #7


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    It was from an latimes article
    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.
  9. Oct 18, 2012 #8
    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...
  10. Oct 18, 2012 #9
    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

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


    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.
  11. Oct 18, 2012 #10
    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.
  12. Oct 18, 2012 #11

    D H

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    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), ...
  13. Oct 18, 2012 #12
    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.
  14. Oct 18, 2012 #13


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    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.
  15. Oct 18, 2012 #14


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    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.
  16. Oct 18, 2012 #15

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    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).
    Last edited: Oct 18, 2012
  17. Oct 18, 2012 #16
    Your right D_H I apologize
  18. Oct 18, 2012 #17
    What about subsidies?
  19. Oct 24, 2012 #18


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    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.
  20. Oct 24, 2012 #19


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    "Rebate"? "Tax burden"? Does the government send Romney a big check? Is it written somewhere that Romney has a tax burden of 30%? Lets 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?
    Last edited: Oct 24, 2012
  21. Oct 24, 2012 #20


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    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 [Broken]

    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!
    Last edited by a moderator: May 6, 2017
  22. Oct 24, 2012 #21
    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.
  23. Oct 24, 2012 #22


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    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.

    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.

    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.

    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.

    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.
    Last edited: Oct 24, 2012
  24. Oct 24, 2012 #23
    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.

    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.

    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.

    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.
  25. Oct 24, 2012 #24


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    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.

    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.

    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.

    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.

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

    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.
  26. Oct 24, 2012 #25


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    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.
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