What percentage of the Federal budget goes to Welfare?

[Blalron]

By welfare, I mean actual handouts to the poor. I'm excluding Social Security because it's basically a pension plan to people who have already paid in their entire lives, and student loans don't count because they have to be paid back.

Also, how does today's percentage compare to what it was before Clinton signed welfare reform into law?

[kunilou]

You need to be more detailed about what you mean by "handouts." Do you include Medicare? The federal portion of Medicaid (which is linked to what the states spend)? Food stamps and WIC? Federal subsidies for the school lunch program? Job retraining progtrams? Pell Grants for college students (which are linked to family income)? Or do you just want to declare what used to be AFDC and post-Clinton is known as TANF?

[Blalron]

You need to be more detailed about what you mean by "handouts." Do you include Medicare? The federal portion of Medicaid (which is linked to what the states spend)? Food stamps and WIC? Federal subsidies for the school lunch program? Job retraining progtrams? Pell Grants for college students (which are linked to family income)? Or do you just want to declare what used to be AFDC and post-Clinton is known as TANF?

Good question. I guess I'd exclude Medicare as "welfare" under the same logic as I'd exclude Social Security (because it's basically a pension program). Medicaid counts because it goes to people who haven't necesarily paid very much (or anything) into it.

So I guess what I'm asking for is: Food Stamps & WIC + Medicaid + Pell Grants + Job Training + School Lunch + TANF.

[Huerta88]

Good question. I guess I'd exclude Medicare as "welfare" under the same logic as I'd exclude Social Security (because it's basically a pension program).

Both of them are pretty far from a pension in theory or practice, and both are/have the potential to be significantly re-distributive.

[Blalron]

Both of them are pretty far from a pension in theory or practice, and both are/have the potential to be significantly re-distributive.

I guess the key difference I'm seeing is this: Insurance (that someone has paid premiums into) may be "redistributive" in the sense that a minority of people will get more than they've paid into it, but I wouldn't classify it as an outright handout. Just like if I get my car totalled, and Geico replaces it, I'm not getting a "handout" from the insurance company. If this were a GD thread, we could argue about the difference, but for the purposes of this thread I'm giving my own idiosyncratic (and perhaps to some extent, arbitrary) definition of "welfare."

[evilbeth]

Are you counting corporate welfare?

[Dewey Finn]

From here (http://www.cbpp.org/cms/index.cfm?fa=view&id=1258):

"Safety net programs: About 14 percent of the federal budget in 2010, or $482 billion, will 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."

[Markxxx]

You also have to consider a lot of states have programs like earnfare or workfare, where you have to work off your food stamps every month.

In Illinois for instance, it's called earnfare, and Walgreens and Avon are two big employers that get breaks, from it. The single recepients of food stamps can work there or at other places for up to six months of every year. They work off their food stamps at minimum wage $8.25/hr.

And other programs as noted, so you can see the actual cost is hard to calculate.

[NOLA Cajun]

SSDI is welfare. It may be administered by the SSA but it is still welfare.

[Crafter_Man]

I'm excluding Social Security because it's basically a pension plan to people who have already paid in their entire lives
Well, not quite. 80% of retirees receive more in Social Security benefits than they paid in payroll taxes. A good article and chart on this topic can be found here (http://mjperry.blogspot.com/2010/04/social-security-payroll-tax-is-very.html).

For most retirees, where do you think the "extra" money comes from?

[BrightNShiny]

I'll add another not-quite. If you haven't worked for 10 years (paying Medicare taxes), you can still enroll in Medicare if you pay the full monthly premium. However, there is assistance available to low-income people who cannot afford the full monthly premium. So, you could get into Medicare without ever paying into it, or paying anything close to what you take out of it.

Furthermore, since the eligibility point is ten-years, that means that someone who paid into Medicare for only ten years and someone who paid into Medicare for 40 years more or less get the same benefit.

[Sam Stone]

Obamacare is massively redistributive, because it offers heavy federal subsidies for lower-income workers. The subsidies go all the way up to family incomes of around $80,000. In fact, the way the subsidies are set up it's quite possible that the lower income workers who have health care will drop off employer health care programs in exchange for an increase in pay, and then use the federal subsidy to pay for health care insurance through a public exchange, and actually come out ahead in cash money.

But no one really knows until the exchanges are up and running and the market reacts to them.

[CC]

(Surprised that mods haven't reprimanded Sam Stone for using a politically loaded term in a GQ thread.) However, I'm wondering if the OP is also ruling out various agricultural subsidies to farmers to not grow crops and other financial subsidies to various industries? It's not insurance, so for the sake of the question, how do you interpret it?

[septimus]

Well, not quite. 80% of retirees receive more in Social Security benefits than they paid in payroll taxes. A good article and chart on this topic can be found here (http://mjperry.blogspot.com/2010/04/social-security-payroll-tax-is-very.html)

Errr ... facts would be interesting, instead of gibberish blog.

First: "Retirees" excludes people who die before retirement; the Soc Sec obviously shows a "profit" on many of them, thus providing more money for those who do live to retire.

Second: Your phrasing implies you ignore that Soc Sec invests their money with a positive return. Of course more will be paid out then paid in! :confused:

Now, if useful facts were studied they might very well support the right-wing agenda to "prove" Soc Sec is just another way to rob from the rich and help the poor. But you won't find such facts at the silly blog you link to, even if the blogger is "a visiting scholar at The American Enterprise Institute". :D

[BigT]

Um, I get Social Security, and I have paid absolutely nothing into it.

[NOLA Cajun]

Then basically BigT you're a welfare recipient. But I think what you really mean is social security disability because as far as I know if you work all your life and didn't pay into the retirement system then you can't receive any benefits. I know a man that worked as a contractor all of his life and never paid any social security and was told he is not eligible to receive any benefits.

Disability is a different story however since it is officially welfare anyone that is "disabled" (and I use that term loosley) can receive it.

[DrDeth]

I'm excluding Social Security because it's basically a pension plan to people who have already paid in their entire lives
Well, not quite. 80% of retirees receive more in Social Security benefits than they paid in payroll taxes. A good article and chart on this topic can be found here (http://mjperry.blogspot.com/2010/04/social-security-payroll-tax-is-very.html).

For most retirees, where do you think the "extra" money comes from?

Except that the system, as a whole- has a surplus, thus contributions pay for benefits. It's an insurance system. In fact, most Private Funded Pensions pay out whaaaay more than the employee paid in.

You do not appear to understand how a pension is funded. It is not "get back out exactly what you paid in" otherwise, what'd be the point? The pension fund does pay out what it gets in, but there are three things that allow some to collect more than they pay in: 1. Some dudes die before collecting their share. 2. The fund earns interest and dividends, etc 3. The employer funds it also.

Soc Sec is not "Welfare" any more than a private Pension is.

[drhess]

I don't if the OP feels their question was answered, but the link to the CBPP provided by Dewey Finn is probably a good answer. One way to avoid the agrugment about Medicare and Soc Security is to reframe the question about what is spent on people outside of benefits only available for retirement age. Then you can debate the percent for each category (what retirees get that others cannot vs what all people can get now).

Anyway, here's an interesting graphic that doesn't show percents (although they give the numbers so you can easily get the precents from the graph) but shows the size of various parts of Obama's propsed budget: http://www.nytimes.com/interactive/2010/02/01/us/budget.html

I know it doesn't exactly address the OP, but it is a fun way to look at the "size" of various things in one nifty interactive graphic.

Also, if you want general bacground on specific programs, the place to look is the "Green Book" http://www.nytimes.com/interactive/2010/02/01/us/budget.html

Note that it is a bit dated (not sure why it isn't updated constantly), but it gets you started.

[septimus]

Anyway, here's an interesting graphic that doesn't show percents (although they give the numbers so you can easily get the precents from the graph) but shows the size of various parts of Obama's propsed budget: http://www.nytimes.com/interactive/2010/02/01/us/budget.html
.

That is a nice graphic! No direct pie-chart percentages, but size=portion is arguably better.

Click "Hide Mandatory Spending" and most of the chart turns white. I'm not sure the anti-spending folks have much to complain about with the 2011 budget. $5 billion less wasted on Education for the Disadvantaged, although the 3% rise at the NIH costs $1 billion. Would be fun to lead one's TeaParty buddies to this graphic and ask them to show what to cut further.

(Did the 2010 budget have special stimulus making this graphic somewhat misleading? Are there similar graphics with other time frames?)

[sangfroid]

An interesting graphic, updated yearly, that was posted on this board a few years ago. Blow it up to full screen and scroll around. Fun stuff for numbers geeks.

link (http://www.wallstats.com/deathandtaxes/)

[LurkMeister]

Um, I get Social Security, and I have paid absolutely nothing into it.

Then basically BigT you're a welfare recipient. But I think what you really mean is social security disability because as far as I know if you work all your life and didn't pay into the retirement system then you can't receive any benefits. I know a man that worked as a contractor all of his life and never paid any social security and was told he is not eligible to receive any benefits.

Disability is a different story however since it is officially welfare anyone that is "disabled" (and I use that term loosley) can receive it.

You also can't receive Social Security Disability benefits without paying something into the system UNLESS you're receiving the benefits based on either a parent's or spouse's earnings. If someone was disabled prior to age 18 and was entitled to child's benefits on a parent's account, those benefits are payable for life. When I was working for Social Security I remember several cases where people in their 50s and 60s were receiving "disabled child" benefits on the account of a deceased parent.

[lindsaybluth]

(Surprised that mods haven't reprimanded Sam Stone for using a politically loaded term in a GQ thread.)

Um, what? Which term? Obamacare? It's been used in the Globe and the NYT, so I'm pretty sure it's not a loaded term.

ETA: "Obamacare" is easier to say than "the recent health care overhaul/bill"

[Rigamarole]

What about unemployment compensation?

[SmartAlecCat]

For most retirees, where do you think the "extra" money comes from?

How many people pay into SS, but then die prior to collecting anything?

(serious question, not rhetorical... I know a lot comes from redistribution from higher paid folks, but certainly some must come from people who die young.)

[Giles]

How many people pay into SS, but then die prior to collecting anything?

(serious question, not rhetorical... I know a lot comes from redistribution from higher paid folks, but certainly some must come from people who die young.)
I don't know the numbers, but here are some categories who pay in and get nothing out:
(1) people who die before retirement, particularly those without dependents to collect.
(2) illegal immigrant workers.
(3) people who pay into the system for less than 10 years.

Categories (2) and (3) do overlap, but they aren't the same: my wife will be in category (3), since she's a green-card holder who will have worked about 6 years in the US when she retires.

[evilbeth]

You also can't receive Social Security Disability benefits without paying something into the system UNLESS you're receiving the benefits based on either a parent's or spouse's earnings. If someone was disabled prior to age 18 and was entitled to child's benefits on a parent's account, those benefits are payable for life. When I was working for Social Security I remember several cases where people in their 50s and 60s were receiving "disabled child" benefits on the account of a deceased parent.

My child receives SSDI and has since birth and she still receives it currently in the same amounts she always has even though our family's only income currently is unemployment. When my unemployment runs out, her SSDI will not be cut off even though neither of her parents has any income.

[LurkMeister]

I don't know the numbers, but here are some categories who pay in and get nothing out:
(1) people who die before retirement, particularly those without dependents to collect.
(2) illegal immigrant workers.
(3) people who pay into the system for less than 10 years.

Categories (2) and (3) do overlap, but they aren't the same: my wife will be in category (3), since she's a green-card holder who will have worked about 6 years in the US when she retires.

(1) When my mother died she was not yet eligible for retirement benefits, had no children under age 18, and was divorced so even the $255.00 death benefit went unpaid.

(3) I had paid into the system for less than 10 years before I got my federal job, and it's not likely that I'll ever bother to try to earn the additional credits I'd need to collect Social Security, since under the current rules I'd only be paid a small amount anyway.

[DrDeth]

My child receives SSDI and has since birth and she still receives it currently in the same amounts she always has even though our family's only income currently is unemployment. When my unemployment runs out, her SSDI will not be cut off even though neither of her parents has any income.

Your current income has nothing to do with it, it's past income which determines eligability.

[Measure for Measure]

Good question. I guess I'd exclude Medicare as "welfare" under the same logic as I'd exclude Social Security (because it's basically a pension program). Medicaid counts because it goes to people who haven't necesarily paid very much (or anything) into it. Careful. A lot of Medicaid actually goes to the elderly occupants of nursing homes.

[anson2995]

The Op asked: "What percentage of the Federal budget goes to Welfare?
By welfare, I mean actual handouts to the poor."

I think the answer is about 3% at the federal level. I count food stamps, WIC, and TANF programs, which cost roughly $105 billion, or 2.8%

TANF & WIC replaced AFDC during the Clinton era. In 1993, the budget for food stamps and AFDC was $24.9 billion, or 1% of the total budget.

The NY Times has a great interactive graphic (http://www.nytimes.com/interactive/2010/02/01/us/budget.html) which breaks it down.

[Skammer]

Disability is a different story however since it is officially welfare anyone that is "disabled" (and I use that term loosley) can receive it. Like my sister in law, diagnosed with MS at age 29 who gets to spend the rest of her life in a wheelchair, not needing* to move a muscle below her neck for the rest of her life, sucking off the taxpayers' teat for free.

*or "able". But we're using the term loosely.

[J Cubed]

Like my sister in law, diagnosed with MS at age 29 who gets to spend the rest of her life in a wheelchair, not needing* to move a muscle below her neck for the rest of her life, sucking off the taxpayers' teat for free.

*or "able". But we're using the term loosely.

Great, another welfare queen* sponging off my hard earned money.

*unless her skin is the same color as mine

[Measure for Measure]

Here are my calculations based upon the Historical Tables of the FY 2009 Budget (.pdf).

All data is for 2006:

Outlays: 2655.4 Billion
deficit: 248.2 billion
defense: 521.8 billion.

"Means tested Enrollment": 354.3 billion
1 Includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions.

354.3 billion is 13.3% of all outlays. Of that 6.8% was medicaid. Of Medicaid, about 60% goes to nursing homes: that figure should increase over time. (Source: Sorry, this is a rough estimate of the nursing home share. I took the 62% number from the state of Arkansas and rounded down to 60%. I couldn't find a national number).

So nursing homes are ~4.1% of the budget. Those freaking elderly invalids really piss me off. Sixty percent of all occupants of nursing homes are on medicaid, though only a minority of them enter the nursing home that way.

Anyway, net out nursing homes and you get 9.3% of the 2006 budget on "Welfare", broadly defined to include means tested veterans pensions. Coincidentally, that outlay was very close to the 2006 budget deficit.

[What the .... ?!?!]

Good question. I guess I'd exclude Medicare as "welfare" under the same logic as I'd exclude Social Security (because it's basically a pension program). Medicaid counts because it goes to people who haven't necesarily paid very much (or anything) into it.

So I guess what I'm asking for is: Food Stamps & WIC + Medicaid + Pell Grants + Job Training + School Lunch + TANF.

Don't forget the earned income credit.

[oliversarmy]

I would posit the question as this:

The people of the nation through their elected representatives have decided that certain dollars raised through taxation should be used to assist a proportion of the population in need of basic sustenance without the ability to do so themselves. What is the percentage of the national budget that goes to these programs?

[BigT]

You also can't receive Social Security Disability benefits without paying something into the system UNLESS you're receiving the benefits based on either a parent's or spouse's earnings. If someone was disabled prior to age 18 and was entitled to child's benefits on a parent's account, those benefits are payable for life. When I was working for Social Security I remember several cases where people in their 50s and 60s were receiving "disabled child" benefits on the account of a deceased parent.

Interesting. I knew my parents' income had something to do with how much money I got, but I didn't know it had to do with my eligibility in the first place. They basically got disability on me to pay my medical bills, as they had exhausted their funding on me after a while.

I will point out that it isn't quite for life: I can lose the money if I go to work, which, before my withdrawal, was just something I chose not to do unless I could get more money than I was already making, as we're still not that well off financially. Only recently did I learn that I could make a fairly significant amount of money and still get my check--but by then I was housebound.

[What the .... ?!?!]

I would posit the question as this:

The people of the nation through their elected representatives have decided that certain dollars raised through taxation should be used to assist a proportion of the population in need of basic sustenance without the ability to do so themselves. What is the percentage of the national budget that goes to these programs?

That is a very good way to phrase it.

Then we can ask a second question where we replace "in need of" with "beyond the levels of"

...... and a third question where we replace "the ability" with "the desire or incentive".

[Measure for Measure]

According to wikipedia, the EITC in 2004 cost $36 billion. That's a highball estimate, as encouraging people to work often removes their eligibility for other federal programs. I'm not sure I would call the EITC a "Handout" (as per the OP) but it is certainly an outlay.

My numbers were rough above. 36/2655.4 = 1.4%. So if you want to add it in, change my figures to 10.7 - 14.7% of the budget.
---

oliversarmy and What the:
Recall: "Means tested Enrollment": 354.3 billion

1 Includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions. Of these means tested enrollment programs, which meet your definition? EITC certainly would not qualify according to the original criteria.

[What the .... ?!?!]

Sorry, I don't understand the question.

FWIW, it's often pointed out that EITC recipients pay into social security so they are just getting that money back. Those who suggest that rarely (never?) point out that their SS benefits are not reduced by having actually put less in.

[Measure for Measure]

That is a very good way to phrase it.

Then we can ask a second question where we replace "in need of" with "beyond the levels of"

...... and a third question where we replace "the ability" with "the desire or incentive". I wasn't sure how to operationalize oliversarmy's definition. Or yours.

EITC is not a "Handout" as it involves a work requirement. The word "Handout" was part of the OP. EITC is a program for the working poor: it's a way of propping up their incomes without resorting to higher minimum wage requirements. Whether it is "Welfare" is a matter of definition. But it doesn't seem to fit oliversarmy's definition, which seems to apply to the most basic safety nets.

So I wanted to ask which programs fall under which definitions. If this is still unclear (and it may be) I can try again.

Personally, I consider welfare to be AFDC+TANF, but I'm not insisting that everyone accept those definitions. Foster care, adoption assistance and means tested veterans benefits don't spring to mind when people complain about those shiftless poor.

[What the .... ?!?!]

Now I see.... thanks.

If EITC isn't welfare it's pretty darn close. The OP only took student loans and social security off the table. EITC is much closer to a handout than those even if there is a work requirement.

Actually Oliver raised the bar when he used the phrase "in need of basic sustenance without the ability to do so for themselves" .... that should take alot of handouts off the table.

[TruCelt]

Well, not quite. 80% of retirees receive more in Social Security benefits than they paid in payroll taxes. A good article and chart on this topic can be found here (http://mjperry.blogspot.com/2010/04/social-security-payroll-tax-is-very.html).

For most retirees, where do you think the "extra" money comes from?


One would think that all that money would have earned some interest in the interim. . .

[furt]

Like my sister in law, diagnosed with MS at age 29 who gets to spend the rest of her life in a wheelchair, not needing* to move a muscle below her neck for the rest of her life, sucking off the taxpayers' teat for free.

*or "able". But we're using the term loosely.Or like the guy I knew who had been drawing a disability check for years for a heart condition (that did not prevent him from playing golf four times a week).


Anecdote war! Which one is right? Because it can't possiblybe both!

[gonzomax]

Social Security is funded by payroll taxes. it is not a drag on the deficit.
It includes survivors benefits for kids whose parents die leaving them unprotected. It pays for disabled who are unable to work, like car accident victims and people who get hurt in some way that keeps them from providing for themselves. For many seniors it is all they have to keep them off the streets.

[Measure for Measure]

My numbers were rough above. 36/2655.4 = 1.4%. So if you want to add it in, change my figures to 10.7 - 14.7% of the budget.
Oops, I take that back. EITC was on my list of means-tested programs. So using a broad definition of welfare, it was about 9.2 - 13.3% of the 2006 budget, depending upon whether you want to include nursing home care, most of which goes to former members of the middle class. The 9.2% figure includes certain veterans benefits, the EITC, the child tax credit and payments for children's health care.

What is considered "Welfare" is purely a matter of definition of course. And welfare payments will be a great deal higher during times of recession.

ETA: Oops again: 9.2% only covers the *refundable portion* of the EITC. But the whole program is only 1.4% of the budget anyway, and my figures were pretty rough.

[TriPolar]

Ok guys:

The people of the nation through their elected representatives have decided that certain dollars raised through taxation should be used to assist a proportion of the population NOT in need of basic sustenance. What is the percentage of the national budget that goes to these programs?

[Measure for Measure]

I don't know, but you're unlikely to get out of the 3-15% range at least during times of prosperity and not considering Obamacare. So definitely over 85% of the typical budget and probably more than 90% is pensions, the military, interest on the debt and other nonwelfare spending.

Of course if you consider pensions to be welfare, that's another ball of wax.

The Federal government is a big pension plan that happens to have an army. One day it will have a health insurance function tacked on, after the US catches up with the rest of the developed world.