NCPA - National Center for Policy Analysis

FEDERAL AID PROGRAMS EXPAND AT RECORD RATE

March 17, 2006

USA Today found that enrollment in 25 major government programs increased an average of 17 percent from 2000 to 2005, while spending on these programs increased 22 percent to $1.3 trillion in 2005. This is the largest five-year expansion of the federal safety net since the Great Society created programs such as Medicare and Medicaid in the 1960s.

According to USA Today:

  • Social programs accounted for over half of federal spending, with enrollment growth responsible for three-fourths of the increase, and increased benefits responsible for one-fourth.
  • Medicaid, the biggest expansion, added 15 million beneficiaries over five years to become the nation's largest entitlement program.
  • Social Security and Medicare were not a factor because baby-boomers do not need these programs until between 2008 and 2011.
  • Increased programs now aim at the under-65 population, especially families earning less than $40,000 a year, for example, the number of mostly low-income college students receiving Pell grants rose 41 percent over five years to 5.3 million.

USA Today also found that the three major causes for soaring enrollment in government programs are:

  • Expanded eligibility -- Congress added food stamp eligibility for 2.7 million people making it easier for recipients to work.
  • Increased participation -- the government prompted participation by shortening forms, reducing office visits and streamlining verification.
  • Welfare reform -- the 1996 overhaul pushed millions of people off cash assistance and into the workforce, and as a result, Congress expanded benefits eligibility to support people with low-wage jobs.

Source: Dennis Cauchon, "Federal Aid Programs Expand at Record Rates," USA Today, March 13, 2006.

For text (subscription required):

http://www.usatoday.com/news/washington/2006-03-13-federal-entitlements_x.htm

 

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