- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Morning Bell: Halting the Explosive Growth of Welfare Entitlements

Posted By Robert Rector On June 25, 2010 @ 9:53 am In Ongoing Priorities | Comments Disabled

Despite its failure last week, Sen. Harry Reid (D-NV) is continuing to push his tax-extenders bill [1]. Bundled together with the many egregious pieces of this bill [2] is a $2.5 billion Temporary Assistance for Needy Families (TANF) emergency fund. This provision ties right into the current administration’s philosophy on government welfare: grow the number of Americans dependent on government by increasing spending.

This is obviously the wrong approach. Instead of throwing more money at the ever-expanding and fiscally unsustainable welfare state, Congress should implement practices that work to move people out of poverty, versus those that do nothing but grow federal bureaucracies.

When President Lyndon B. Johnson announced his famous “War on Poverty” in 1964, his intent was to win the war by eliminating the causes of poverty.  He actually promised to shrink, not enlarge, the welfare state.

Just the opposite has occurred. Today, we spend 13 times more on welfare than in 1965 [3] (even after adjusting for inflation), and the welfare state has made the problem of poverty worse by undermining the very fundamentals that decrease dependence: stable families and a strong work ethic. Out-of-wedlock childbirth is at an historic high of 40 percent [4] and means-tested welfare has grown faster than any other sector of government [5].

Furthermore, since the 1960s, the United States has spent $15.9 trillion on welfare. Despite the current state of the nation’s debt, President Barack Obama plans to spend $10.3 trillion [6] more over the next 10 years.

The welfare reforms of 1996 [7] attempted to tame this beast by putting in place reforms that would make welfare programs do what they should: move people out of poverty. It did this by restructuring one of the more than 70 welfare programs. What had been the Aid to Families with Dependent Children (AFDC) – a cash-assistance program – became the Temporary Assistance for Needy Families (TANF) program. Instead of simply receiving a check from the government each month, recipients were now required to be involved in work or a work preparation activity for 20 to 30 hours a week in order to receive aid. These reforms were dramatically successful. State welfare agencies became job placement offices, and recipients moved from a cycle of poverty into job seeking and employment. The number of families in poverty dropped by 2.8 million and the child poverty rate dropped significantly.

Instead of adding $2.5 billion to the welfare state, which will only increase the number of individuals dependent on government assistance, the federal government should make fundamental changes that would decrease dependence and subsequently ease the burden on the nation’s ever-growing deficit. Reforms, such as those that took place in 1996, along with others, must be put in place if the United States ever hopes to get back on a track of financial stability.

These reforms should be based on the following principles [7]:

1. Slowing the growth of the welfare state. After the recession ends, Congress should roll back welfare spending to pre-recession levels and then cap it [8] at the rate of inflation.

2. Promoting personal responsibility and work. Similar to the TANF reforms, other large programs such as Food Stamps [9] and housing assistance [10] should include work requirements.

3. Providing a portion of welfare assistance as loans rather than as grants. Government assistance can incentivize behaviors that lead to increased dependence. To reduce this risk, some welfare assistance should switch from grants to loans that must be partially repaid.

4. Ending the welfare marriage penalty and encouraging marriage in low-income communities. The decreasing rate of marriage is the greatest cause of child poverty. Today, the out-of-wedlock birthrate in the United States is at an historic high. Marriage penalties, present in many current welfare programs, should be reduced or removed, and information on the importance of marriage should be provided in low-income communities.  

5. Limit low-skill immigration. A significant portion (15 percent) of welfare spending goes to homes headed by lower skill immigrants with a high school degree or less. The government should limit immigration to those individuals who will be net fiscal contributors, meaning they will pay more in taxes than they take in benefits. Also, the government should not provide amnesty to illegal immigrants, as doing so would instantly add millions of people to the welfare roles.

Throwing more money at the ever-growing behemoth that has become the U.S. welfare system will do nothing to improve the wellbeing of our nation’s poor. Instead, it will lead to increased dependence and unsustainable national spending. Congress must implement policies that attack the roots of poverty, instead of promoting it with more handouts. This is the only way the United States will produce self-reliant individuals and stable families: the greatest weapons against poverty.

Quick Hits:

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/06/25/morning-bell-halting-the-explosive-growth-of-welfare-entitlements/

URLs in this post:

[1] Sen. Harry Reid (D-NV) is continuing to push his tax-extenders bill: http://www.politico.com/news/stories/0610/38968.html

[2] the many egregious pieces of this bill: http://www.heritage.org/Research/Reports/2010/05/Routine-Tax-Extenders-Package-Contains-New-Irresponsible-Spending-and-Tax-Hikes

[3] we spend 13 times more on welfare than in 1965: http://www.heritage.org/Research/Reports/2010/06/%7E/media/Images/Reports/2010/b2427/b2427_chart1.ashx?w=500&h=547&as=1

[4] Out-of-wedlock childbirth is at an historic high of 40 percent: http://www.heritage.org/Research/Reports/2010/06/%7E/media/Images/Reports/2010/b2427/b2427_chart9_600px.ashx?w=600&h=422&as=1

[5] means-tested welfare has grown faster than any other sector of government: http://www.heritage.org/Research/Reports/2010/06/%7E/media/Images/Reports/2010/b2427/b2427_chart3.ashx?w=400&h=632&as=1

[6] $10.3 trillion: http://www.heritage.org/Research/Reports/2009/09/Obama-to-Spend-103-Trillion-on-Welfare-Uncovering-the-Full-Cost-of-Means-Tested-Welfare-or-Aid-to-the-Poor

[7] welfare reforms of 1996: http://www.heritage.org/Research/Reports/2010/06/Confronting-the-Unsustainable-Growth-of-Welfare-Entitlements-Principles-of-Reform-and-the-Next-Steps

[8] roll back welfare spending to pre-recession levels and then cap it: http://www.heritage.org/Research/Reports/2010/06/%7E/media/Images/Reports/2010/b2427/b2427_chart8_750px.ashx

[9] Food Stamps: http://www.heritage.org/Research/Reports/2010/06/%7E/media/Images/Reports/2010/b2427/b2427_chart5_750px.ashx

[10] housing assistance: http://www.heritage.org/Research/Reports/2010/06/~/media/Images/Reports/2010/b2427/b2427_chart6_750px.ashx

[11] reached agreement on a sweeping Wall Street reform bill: http://www.politico.com/news/stories/0610/38976.html

[12] isn’t growing as fast as the government predicted: http://www.foxnews.com/politics/2010/06/25/government-lowers-growth-estimate-quarter-percent/

[13] led to the collapse of a Senate bill: http://online.wsj.com/article/SB10001424052748704227304575327273014747664.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

[14] an outspoken critic of immigration enforcement at the local level: http://www.foxnews.com/politics/2010/06/24/obama-administration-picks-critic-immigration-enforcement-key-role-ice/

[15] calling on President Obama to change course in the war in Afghanistan: http://www.politico.com/news/stories/0610/39010.html#ixzz0rrydK7Ox

Copyright © 2011 The Heritage Foundation. All rights reserved.