Welfare "Cuts"?

By Payne, James L. | The American Enterprise, November-December 1997 | Go to article overview

Welfare "Cuts"?


Payne, James L., The American Enterprise


"Welfare Cuts Will Leave Thousands Homeless," insists a recent New York Times headline. "Worried Welfare Recipients Bemoan Cuts in Benefits" adds the Los Angeles Times. The Washington Post claims that the 1996 welfare reform makes "deep and gratuitous cuts in all manner of federal aid to the poor." The Wall Street Journal agrees, reporting "deep cuts in food stamps." And the Christian Science Monitor reports with precision that welfare reform means "federal spending would drop an estimated $59 billion over the next seven years"--a situation it deplores in an editorial entitled, "Overdoing Welfare Cuts."

These are not isolated comments and reports. The National Newspaper Index shows the overall pattern. Since 1989, the nation's major papers have printed 183 stories which feature the keywords welfare and cuts, but only 13 stories with the keywords welfare and increases--a 14-to-1 ratio.

Yet this picture of a fast-shrinking welfare system is simply not true: Nobody is cutting welfare today. There may be great controversy over welfare programs, with many voices raised against them, but neither the public nor lawmakers really control welfare spending. The American welfare system is a self-sustaining industry dominated by the special interests that run it and profit from it. These forces, probably the most powerful lobby the country has ever known, have ensured that welfare spending remains on a continuous upward spiral. True welfare reform will require understanding how this biased system has entrenched itself and devising a way to overcome it.

The allegations of welfare "cuts" go back at least 30 years, and they have been flatly false or just as long. The proof is in the authoritative "Green Book," the yearly compilation of welfare programs made by the staff of the House Ways and Means Committee. This volume-which, by the way, does not include all welfare programs-shows that real federal, state, and local spending on low-income programs went from $64 billion in 1968 to $345 billion in 1994, the latest year for which complete data are available. (These numbers are in constant 1994 dollars, adjusted for inflation.) Real welfare spending has gone up under every administration--heartless Republican and soft-touch Democrat alike. And it has risen by 56 percent, after inflation, just from 1989-94.

All right, the reader might say, perhaps welfare hasn't been cut in the past. But all that changed with the 1996 federal welfare reform. Wrong. It's true that certain categories of recipients will lose benefits under the `96 reform, but this will be more than counterbalanced by the addition of new recipients and the growth of average payments.

According to projections from the Congressional Budget Office, total spending in the programs affected by the `96 welfare reform will definitely increase from 1995-2002. Food stamps (which the Wall Street Journal said would be "cut") are set to go from $26 billion to $31 billion. Spending for child nutrition is slated to rise from $8 billion to $11 billion. The SSI disability program is headed from $25 billion to $30 billion. Medicaid is expected to go from $89 billion to $165 billion, the Earned Income Credit from $15 billion to $23 billion.

Overall, spending on these various welfare programs is not on a path to "drop" by $59 billion, as the Christian Science Monitor claimed, but rather to increase by $110 billion. The New York Times headline shouldn't have been "Clinton Signs Bill Cutting Welfare," but "Clinton Signs Bill and Welfare Spending Keeps Growing." And all of the figures I've just cited were calculated before the changes made in the 1997 summer budget deal--which not only rolled back some of the `96 reforms (restoring welfare aid to immigrants, for instance, and backpedaling on efforts to hold down ballooning "disability" payments), but also inaugurated fresh welfare programs like the new $24 billion child health entitlement.

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