Study: More Than Half a Trillion Dollars Spent on Welfare But Poverty Levels Unaffected

CNS ^ | June 25, 2012 | Matt Cover

[Hunton Peck]

“The vast majority of current programs are focused on making poverty more comfortable … rather than giving people the tools that will help them escape poverty.”

(CNSNews.com) – The federal government is not making much headway reducing poverty despite spending hundreds of billions of dollars, according to a study by the libertarian Cato Institute.

Despite an unprecedented increase in federal anti-poverty spending, the national poverty rate has not declined, the study finds.

“[S]ince President Obama took office [in January 2009], federal welfare spending has increased by 41 percent, more than $193 billion per year,” the study says.

Federal welfare spending in fiscal year 2011 totaled $668 billion, spread out over 126 programs, while the poverty rate that remains high at 15.1 percent, roughly where it was in 1965, when President Johnson declared a federal War on Poverty.

In 1966, the first year after Johnson declared war on poverty, the national poverty rate was 14.7 percent, according to Census Bureau figures. Over time, the poverty rate has fluctuated in a narrow range between 11 and 15 percent, only falling into the 11 percent range for a few years in the late 1970’s.

The federal poverty rate is the percentage of the population below the federal poverty threshold, which varies based on family size.

While the study concedes that some of the increased spending under Obama is a result of the recession and the counter-cyclical nature of anti-poverty programs, it also finds that some of the increase is deliberate, with the government having expanded eligibility for welfare programs.

In fiscal year 2008, anti-poverty spending was $475 billion. In fiscal year 2009, when Obama took office, it had risen to $590 billion.

“But the dramat­ically larger increase also suggests that part of the program’s growth is due to conscious policy choices by this administration to ease eligibility rules and expand caseloads,” the Cato report says. “For example, income limits for eligibility have risen twice as fast as inflation since 2007 and are now roughly 10 percent higher than they were when Obama took office.”

In fact, the study points out that according to the administration’s own projections, federal welfare spending is unlikely to decline even after the economy recovers – further evidence that not all of the increase in spending is recession-related.

“All this spending has not bought an ap­preciable reduction in poverty,” the study says. “[T]he poverty rate has remained relatively constant since 1965, despite rising welfare spending.”

The study counts as a welfare program any federal program that is means-tested and provides some kind of cash or in-kind benefit. Means-tested programs are federal programs that only make benefits available to people at or below a certain income level. In-kind benefits are things like healthcare, housing, or other non-cash benefits that are given in lieu of money.

Included in this expanded definition of welfare spending are traditional welfare programs such as food stamps and cash welfare benefits, as well as in-kind, means tested programs like Medicaid, energy assistance grants for low-income people, and the refundable portions of the Earned Income Tax Credit.

The study faults the way poverty programs are designed, saying that the increase in spending and largely unchanged poverty rate showed that the issue is not a matter of money, but a matter of what the programs aim to achieve.

“The vast majority of current programs are focused on making poverty more comfortable – giv­ing poor people more food, better shelter, health care, and so forth – rather than giving people the tools that will help them escape poverty.”

Instead, the study recommends refocusing anti-poverty efforts on keeping people in school, discouraging out-of-wedlock births, and encouraging people to get a job – even if that job is a low-wage one.

“It would make sense therefore to shift our anti-poverty efforts from government programs that simply provide money or goods and services to those who are living in poverty to efforts to create the condi­tions and incentives that will make it eas­ier for people to escape poverty.

[driftless2]

At its core, the whole welfare system is racist. I’ll bet the architects and supporters of the welfare state believe the people they’re trying to “help” are too stupid to make it on their own. And, of course, they want these people as permanent voters for Big Government. Which is why they’ve opposed all efforts to get people off welfare.

[stuartcr]

I’m responding to the first line in the thread. What is my premise? I didn’t think I presented one. Please explain.

[stuartcr]

What are the tools that the article is talking about?

[Hunton Peck]

“What is my premise?”

Your question seemed to be based on the assumption that I wrote the article, or endorsed all its recommendations, but on second look, it may have been just a general observation phrased in the form of a question.

Sorry if I misunderstood.

[reg45]

As long as "poverty" is defined as the 15th percentile of family incomes or lower, there will ALWAYS be 15% of the population "in poverty".

In the same way, about half of the population will have below average intelligence.

[TurboZamboni]

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And the Winner Is ... Social Security: The 10 Most Harmful Government Programs http://www.humaneventsonline.com/article.php?id=13871

[TurboZamboni]

Instead, the study recommends refocusing anti-poverty efforts on keeping people in school, discouraging out-of-wedlock births, and encouraging people to get a job – even if that job is a low-wage one.

I used to tell the kids I used to have the surest way to almost guaranty you won't be poor is:

1) finish high school 2) don't have a kid before marriage 3) stay off drugs

2 of 3 took the advice. One continues to be lost in the world.