Welfare Spending Under the Boehner Plan

Bob Greenstein of the Center on Budget and Policy Priorities claims that the Boehner budget is a form of “class warfare.” He says that “if enacted, it would produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.”

What Greenstein disingenuously fails to acknowledge is that President Obama has already presided over the greatest increase in means-tested welfare or anti-poverty spending in the history of the nation. At best, the Boehner plan calls for a modest, partial rollback of these massive spending increases. The Boehner plan does not contain transformational changes needed to control spending.

Greenstein employs a typical “spending ratchet” ploy to expand the welfare state. Under this ploy, massive increases on spending on the poor are never reported or acknowledged; they occur invisibly. However, any effort to roll back spending increases, even marginally, is immediately met with shrill denunciations about “eviscerating” the poor. In Greenstein’s worldview, welfare spending is permitted to go only in one direction: up.

The federal government operates over 70 means-tested assistance programs. These programs provide cash, food, housing, medical care, social services, and training targeted exclusively to poor and low-income Americans. (Means-tested programs do not include Social Security and Medicare.) Moreover, welfare programs have failed to address the causes of poverty, and the capacity for self-support has actually declined.

President Obama has already increased federal means-tested spending from $471 billion in fiscal year (FY) 2007 to $701 billion in FY 2011. That’s a 50 percent increase. When fiscal contributions that state governments make to federal means-tested welfare programs are included, total spending in FY 2011 will come to $910 billion. That’s almost $10,000 for every poor and low-income person in the U.S.

According to Obama’s budget plans, this spending would not decline in future years. In fact, it will soon exceed $1 trillion per annum. Facing massive future deficits, the nation simply cannot afford this extravagance.

Even before the recession began, means-tested spending was already at a historic high. The best policy with respect to means-tested spending would be to gradually roll total spending back to pre-recession levels, adjusted for inflation. Once that rollback was accomplished, spending could increase at the rate of inflation in future years. This would save roughly $2 trillion over the next decade without “eviscerating” the poor.

The Boehner budget plan does not appear to require a rollback of that magnitude. The plan would almost certainly leave intact much of the increases in means-tested welfare that have occurred in recent years. Under the plan, it seems likely that means-tested aid to the poor would remain above pre-recession levels, even after adjusting for inflation. The Boehner plan does not fundamentally change the approach to any spending, including anti-poverty spending, and therefore fails to control the explosive growth of welfare spending.