Potatoes move along a conveyer belt after delivery at a production facility in Oregon, U.S. (Photographer: Meg Roussos/Bloomberg)

Actually, the U.S. Can Afford Welfare

(Bloomberg Opinion) -- About 42 million people received benefits in the 2017 fiscal year from the Supplemental Nutrition Assistance Program — still widely known as food stamps, although the paper coupons were replaced by debit cards more than a decade ago. That’s a lot of people! It’s almost 13 percent of the U.S. population, which is down from a couple of years ago but quite high by historical standards:

This is context for the efforts by House Republicans to cut back the SNAP program as part of this year’s farm bill, which failed a vote on the House floor last week because of an immigration-policy-related revolt by conservatives but will reportedly be brought up again next month. Somewhat perversely, the SNAP provisions approved by the House Agriculture Committee wouldn’t actually reduce spending, because a work requirement for food stamp recipients is accompanied by outlays on job training programs and administrative costs that more than offset the expected savings.

Then again, spending on safety-net welfare programs such as SNAP really isn’t a problem. Yes, participation is up — by the Census Bureau’s count, the percentage of the U.S. population living in households that received some sort of means-tested cash or noncash assistance from the government (including school lunch) rose from 25 percent in 2002 to 35 percent in 2016. But while outlays on SNAP and other means-tested programs rose a lot during the last recession and its aftermath, they’ve been falling in recent years. According to the historical statistics maintained by the White House Office of Management and Budget, in fact, they’re now below their long-run average as a percentage of gross domestic product (which despite GDP’s flaws still seems to be the best way to compare government spending over time). That long-run average was of course driven up by big spending increases and GDP declines during the Great Recession, but today’s spending is similar to that of the 1970s, 1980s and 1990s:

The definition of safety-net programs I’m using here is that of the Center for Budget and Policy Priorities, which takes the spending on “income security” reported by the Office of Management and Budget and subtracts out a couple of subcategories that aren’t like the others.  This accounting entirely ignores Social Security, Medicare, Medicaid and other federal health programs, which I realize may bring to mind the phrase “Other than that, Mrs. Lincoln, how was the play?” But I think it comports with the public understanding of what “welfare” is.

Many people’s understanding of welfare may be even narrower than that, encompassing mainly the program previously known as Aid to Families With Dependent Children and revamped in 1996 into Temporary Assistance for Needy Families. But spending on such family and other support assistance was falling as a share of GDP long before the 1996 welfare reform, with other, less obviously welfare-y programs taking up the slack.

Food stamps and other nutrition programs now account for the biggest share of federal safety-net spending. Next up is the earned income tax credit, a benefit for low-income working people that grew out of conservative economist Milton Friedman’s proposals for a negative income tax. Then comes Supplemental Security Income, a means-tested program administered by the Social Security Administration that pays benefits to elderly, disabled and blind Americans with especially low incomes. After that is unemployment compensation, which rises during recessions and falls during recoveries but appears to be on a long-run downtrend. And then there’s TANF and other support assistance. Again, this ignores Social Security and the various government health-care programs. Current spending on those is more than five times the spending on the safety-net programs I’ve described above, and forecasted rises in that spending will pose all sorts of fiscal challenges in the coming years. But that’s sort of my point. The U.S. spends a ton of money on benefits and health care for the elderly, and a lot on health care in general. It spends far less on direct aid to people who are struggling financially, and that spending isn’t rising as a share of GDP.

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