Welfare Spending Shattering All-Time Highs

By Robert Rector and Amy Payne

The Heritage Foundation

It’s been a pretty big year for welfare—and a new report shows welfare is bigger than ever.

The Obama Administration turned a giant spotlight on the welfare system in July when the Department of Health and Human Services (HHS) proclaimed it had the authority to gut the work requirements from the welfare reform that had helped lift so many people out of poverty after 1996.

This morning, a new report by the nonpartisan Congressional Research Service (CRS) shows the staggering reality of the growing welfare state—echoing Heritage’s own research that reveals welfare spending is approaching the $1 trillion mark.

Roughly 100 million people—one-third of the U.S. population—receive aid from at least one means-tested welfare program each month. Average benefits come to around $9,000 per recipient. If converted to cash, means-tested welfare spending is more than five times the amount needed to eliminate all poverty in the United States.

Despite the fact that welfare spending was already at record levels when he took office, President Obama has increased federal means-tested welfare spending by more than a third. Benefits under “means-tested” programs are calculated based on a recipient’s means to support himself; in other words, they are intended to assist low-income Americans. The character of this aid is hand-out more than hand-up. Able-bodied recipients rarely are required to work or prepare for work to receive aid.

At the beginning of this year, only four of the 80-plus federal welfare programs had work requirements; the Obama Administration has now suspended the work requirements in two of these. After the Obama Administration suspended the work requirement from the food stamp program in 2009, the number of people on food stamps doubled.

The more than 80 federal means-tested aid programs provide cash, food, housing, medical care, and social services to low-income people. Here’s how the spending breaks down:

• Federal: At $746 billion, federal means-tested spending exceeded spending on Medicare ($480 billion), Social Security ($725 billion), or the defense budget ($540 billion).
• State: In 2011, state contributions into federal welfare programs came to $201 billion, and independent state programs contributed around $9 billion.
• Combined: Overall means-tested welfare spending from federal and state sources reached from all sources reached $956 billion.

Some might argue that this is a reasonable, temporary response to the recession, but Obama seeks a permanent increase in the size of the welfare state.

According to the President’s budget plans for fiscal year 2013, means-tested welfare will not decline as the recession ends, but will continue to grow rapidly for the next decade. Overall, President Obama plans to spend $12.7 trillion on means-tested welfare over the next decade.

Welfare spending has long passed the amount spent on defense. In 1993, welfare spending exceeded defense spending for the first time since the Great Depression of the 1930s. In subsequent years, the ratio of welfare to defense spending averaged about $1.33 to $1. Obama’s spending plans would inflate this disparity: By 2022, there will be $2.33 in federal and state welfare spending for every $1 spent on national defense.

Needless to say—but we’ll say it anyway—Obama’s big spending plans will result in ruinous and unsustainable budget deficits. These deficits are, in part, the result of dramatic, permanent increases in means-tested welfare. An important step in reducing the federal deficit would be to return welfare spending to pre-recession levels.

Doubling the welfare rolls, handing out benefits without any work requirements, and spending twice as much on welfare as we spend on defense: This is Obama’s new normal.

Quick Hits:

• After Tuesday’s debate was over, President Obama shared more information about the terrorist attack in Libya with the man who questioned him about the lack of security.
• Last week’s surprisingly low number of applications for U.S. unemployment benefits was an aberration, as Heritage’s James Sherk predicted. The latest figures showed an increase of 46,000 to 388,000.
• The troubled battery maker A123 “won a private meeting and phone call with Obama, a trade mission slot and $250 million in stimulus money before it went bankrupt,” reportsThe Washington Guardian.
• Newsweek will no longer print its magazine after the end of this year. It is moving to an online-only format.
• The House of Representatives filed a suit challenging the President’s use of executive privilege in the Fast and Furious scandal. The Justice Department is now seeking to get that lawsuit dismissed.