NCPA - National Center for Policy Analysis

$412 Billion in Welfare Spending in 2013

January 16, 2015

America spent a whopping $412 billion in 2013 on federal welfare programs. That number is staggering, but especially so compared to welfare spending just 15 years earlier: in 1998, spending on federal welfare programs cost $225 billion in today's dollars. Between 1998 and 2013, the United States saw an 83 percent increase in federal welfare spending.

These numbers come from a new report from Diana Furchtgott-Roth, senior fellow at the Manhattan Institute and director of Economics21.

What costs the most? Just four programs are responsible for 92 percent of all welfare spending. Medicaid, which takes up 64 percent of total spending, was the most expensive, followed by the food stamp program (SNAP) at 19 percent. The Temporary Assistance to Needy Families (TANF) program and the Section 8 Housing Choice Vouchers program each were responsible for 4 percent of federal spending.

While Medicaid was responsible for the largest amount of spending, the food stamp program saw the biggest spending increase, tripling from 1998 to 2013.

Furchtgott-Roth says states should be given more flexibility to rearrange funds and spend federal dollars in ways that best suit their states. She offers the example of a state that may have low food prices but high housing costs -- if that state could transfer funds from the food stamp program to housing programs, it could be more efficient in its use of resources. Similarly, giving states more leeway in spending could allow them to direct resources to programs that function better than others.

Moreover, she writes that allowing states to funnel welfare savings towards other uses would encourage state governments to be more efficient and incentivize them to cut costs.

Source: Diana Furchtgott-Roth, "Welfare in America, 1998-2013: The Case for Further Reform," Economics21, January 2015. 

 

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