Poverty and Spending Over The Years
The United States has dramatically increased federal spending fighting poverty over the last 50 years. In 1960 we spent $445 per person in poverty which steadily increased to where in 2010 we spent $7,741 per person. This represents the total cost of the 12 Federal Safety Net programs and has been stated in 2010 dollars to eliminate the impact of inflation. Most of the 12 antipoverty programs were created over this time frame and all of them expanded their scope and reach. Yet despite the increase in spending, the poverty level has remained fairly constant at between 12% – 15% of the population[i]. While we have spent more and more money we have not lessened the number of people in poverty[ii]. Why? The reason is because our system is poorly designed. It doesn’t have “conditions” attached to it, it “doesn’t make work pay” and it lessens responsibility of participants.
No Conditions Attached - The 12 Federal Safety Net programs do not have Conditions attached to them such as timeframes, work requirements or job training[iii]. Without Conditions the programs are merely handouts with no expectation of anything in return. Therefore we don’t encourage personal advancement or economic independence.
Doesn’t “Make Work Pay” - The combined programs discourage work because as participants raise their income from jobs they lose a greater amount in benefits. This is not always true for specific programs but is true when the system is viewed as a whole. For example, SNAP program benefits decrease as the income of the participant increases but not so much that the benefit loss is greater than the income gained. But when housing, school lunch or other programs are added in, the loss in overall benefits is so large as to discourage obtaining additional outside income.
Lessening Responsibility – The Federal Safety Net Programs are directed at supplying a specific “need” (such as food or housing) but have the unintended consequence of lessening the responsibility of the poor. The school lunch program is a good example. A family of four with $20,000 in annual income would qualify for $433 in monthly SNAP benefit[iv] (food stamps) and their two children would qualify for free school lunches. Isn’t it more desirable for parents to provide a lunch to their children than for the government to do so? Parental responsibility for their children is a foundation of a strong democracy and should be the aim of a welfare program. It would seem that there is room in the SNAP money for parents to buy food for a school lunch. Even if we think the funds are too light for this expenditure than shouldn’t we raise the SNAP benefit instead of having the government provide a school lunch? Parents can stretch a dollar further than the government can and they can provide a lunch specific to their child’s likes and needs.
The Lessening of responsibility is more profound in the case of a welfare recipient being addicted to drugs or alcohol. Our welfare system ignores this predicament and continues to fund food, housing and etc. with no requirement for personal responsibility. On the surface most of us would say we ought to stay out of peoples private affairs and let them run their lives. Fair enough. It is one thing to respect peoples’ privacy, but quite another to enable destructive behavior. When it is public money enabling destructive behavior then don’t we have a moral obligation to address the problem? Our current system of independent programs supplying a “need” miss this point. A coordinated system could address this issue with drug and alcohol testing, or other conditions such as limited timeframes for benefits.
More harm than good? - What has all our spending accomplished if we haven’t lowered the poverty level? We have paid out a lot of money and made many lives more comfortable and easier. But we have not promoted a large percentage of people to economic independence. Are we actually trapping people within government welfare, discouraging their independence and personal responsibility and therefore doing more harm than good?
This is a question with diverse opinions. Many argue that the middle class has shrunk over the last 50 years, that jobs for those with low education are limited and that the poor have few opportunities for advancement. Without government welfare, it is argued, the poor would have little to fall back on and would lead lives of desperation. But others argue that many in poverty are not destitute at all and cite statistics such as nearly 99% of poor households own a TV, 84% have air conditioning, 75% own a car and over 43% own their own home[v]. They argue paying benefits to these households encourages laziness and that it is not fair to those who work hard to achieve an equivalent standard of living.
But no matter your view on what our welfare payments have achieved, one fact remains. That fact is our uncoordinated, antipoverty programs are not effective at lowering the number of people in poverty and we have to take that as an overall failure. We can all agree that lives of independence and economic freedom are the goals of welfare and as it relates to this goal we have failed. Therefore, it is time to address the overall system and seek meaningful change.
Ideas for change are included on the Improvements Page.
Federal spending, population and poverty totals[vi]
Total People in Welfare Expenditure
Population[vii] Poverty[viii] Expenditures[ix] Per Person
(Millions) (Millions) (Billions) In Poverty
1960 179.5 39.7 $17.7 $445
1970 202.2 25.4 $43.9 $1,726
1980 225.0 29.3 $128.8 $4,399
1990 248.6 33.6 $138.1 $4,113
2000 278.9 31.6 $204.7 $6,483
2010 305.7 46.2 $357.5 $7,741
[i] U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2010; Table 5. September 2011.
[ii] The number of people in poverty is not influenced by the benefits received from federal, state or non-profit programs. For example, SNAP benefits are not included as income to a poor person when determining their poverty status. Poverty statistics are not generated on an “after benefit” basis.
[iii] The TANF program is one exception to this statement – it has a work requirement attached to it whereby the goal is to move participants from welfare to work over a five year period. Without all the programs having such a requirement the impact is diluted.
[iv] Calculated using the USDA SNAP screening tool [Internet]. Data retrieved October 24, 2011. Available from:
http://www.snap-step1.usda.gov/fns/
[v] The Heritage Foundation, Poverty and Inequality. Robert Rector and Rachel Sheffield, Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today? July 19, 2011. Available from: http://www.heritage.org/Research/Reports/2011/07/What-is-Poverty
[vi] Table presents selected years from 1960 to 2010. All years are available upon request from FederalSafetyNet.com.
[vii] U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2010; Historic Poverty Tables – People, Table2. September 2011.
[viii] Ibid
[ix] USGovernmentSpending.com [Internet]. Totals obtained in same manner as 2010 program costs as per the Safety Net Programs Page. Included Payments to States for Child Care Support Enforcement and Family Support for times frames prior to the TANF program. Retrieved October 20 - 25, 2011. Totals were then adjusted to 2010 constant dollars using the Consumer Price Index. Full data available upon request from FederalSafetyNet.com.
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