welfare coverage

Max Sawicky sawicky at epinet.org
Mon Apr 26 11:50:51 PDT 1999


I appreciate the provocation to get more up-to-date on this stuff. There is generally only a single year of post 1996 (the year of welfare reform) data, and in light of this past week's report from Wendell Primus of the Center for Budget and Policy Priorities, it certainly is not good news.

There is a 7% dip in Medicaid recipients after 1996 (e.g., 96-97), mostly children and adults in AFDC families. At the same time, there was some expansion of eligibility. To some extent, as you said, the decline could be due to failure of states to maintain enrollment of eligible persons, though one could ask why they did not do so before as well. To some extent the extent of benefit from historically unprecedented, low unemployment rates could have disqualified them for medicaid. Better measures in this vein -- which I don't have here -- would be recipients as a share of those eligible, eligibles as a share of the relevant population group, etc.

Spending is still up, despite the enrollment drop.

Medicaid recipients: Program payments:

1992 31.2 Million $ 115.9 billion 1993 33.4 1994 35.1 1995 36.3 1996 36.1 152.9 b 1997 33.6

[source: http://www.hcfa.gov/medicaid/2082-1.htm ]

Medicaid Program Expenditure (billions, current)

1980 $ 26.1 1990 75.4 1992 106.4 1994 131.0 1996 147.7 1998 165.5 (projected)

http://www.hcfa.gov/stats/NHE-Proj/tables/t01.htm

Regarding Food Stamps, it turns out that there is also an alarming dip -- 14% or so -- to roughly 1991 levels in nominal spending and enrollment from 1996 to '97, though this is partially offset by increases in WIC and other food assistance programs. Unlike Medicaid, there was specific narrowing of eligibility (e.g., immigrants) in the FSP.

Again, the right scaling factor would be informative. The poverty and unemployment factors are relevant here too. On the whole, enrollment in the FSP is lower than at any time after 1991, whereas persons in poverty in 1997 was very close to what it was in 1991, and lower than 1992-94. Unemployed persons now is obviously at an historic low.

Here's some links:

http://www.ssa.gov/statistics/hdabs98.html#FoodStamps

http://www.econ.ag.gov/Briefing/foodasst/charts.htm

Here's new testimony from Wendell Primus on the effects of welfare reform. He was one of approximately three in the Clinton Administration to resign in protest over Clinton decisions. (I think the other two were Peter Edelman and David Ellwood, tho I could be wrong on that.) Wendell concurs that the decline in FSP participation exceeds the likely reduction in need given the state of the economy. Reductions in food aid and cash welfare beneficiaries after 1995 are significant, though some of this is offset by EITC increases. Full testimony is here:

http://www.cbpp.org/4-22-99wel.htm


> >FSP and Medicaid are uncoupled from AFDC, so losing TANF has
no bearing on their eligibility for the other two. >


> Not legally, no, but certainly in practice. People kicked off
AFDC often assume they've lost eligibility for Food Stamps & Medicaid, and no one is telling them anything to the contrary. I know this is happening in NYC - where the welfare offices have been renamed job centers - and assume it's happening elsewhere as well. >

The Bottom Line

The 1996-97 change is significant for the two programs most affected -- AFDC/TANF and Food Stamps. A broad measure of 'social welfare expenditures' (Federal, state and local, including social insurance, health, and education) for 1994 (latest year available) was $1,435 billion, or 21% of GDP. Of this, FSP ($25.3b) and AFDC ($22.8b.) were each less than two percent. These programs have recently sustained reductions in the 10-25% range not attributable to low unemployment. Some of the foregone spending was offset by other categories (e.g., the EITC).

Brother Noonan said: "Max surprises me with his "more dollars spent" argument as I'm most used to hearing that argument from Rush Limbaugh. When Max has his "welfare is wonderful here in the workers' paradise" paper ready, I will look forward to reading it as I have considerably more respect for him than I do for Limblather."

I appreciate the favorable comparison to Rush, but I don't think *anything* I said deserves to be translated as "welfare is wonderful . . . etc." I'd prefer something reflecting the reality that the vast bulk of the U.S. welfare state remains with us. A political reason for avoiding expressions like, "it's gone," "dismantled," or "devastated" is that these make it easier for Congress to get rid of more.

Gross spending is a relevant datum, if used properly. The GOP is fond of abstracting from inflation and need when they use such numbers. When we are talking about social welfare in the large, the concept of need is not very well-defined, and mere inflation-correction is a very conservative criterion for magnitude. The run-up in Medicaid spending since 1980 has been pretty remarkable in terms of tax dollars foregone, which speaks to political willingness to commit resources, though it may be over now.

The cuts to date in Food Stamps and AFDC/TANF are serious for the families involved. Primus estimates the bottom decile of single-mother families lost 16.3% of disposable income on average from 1995 to 1997, well over their gain of 6% between '93 and '95. The loss for the second decile (keeping in mind this is a low income group overall) drops off to 5.1%, less then their gain of 7.1% from 93 to 95. The second quintile is well ahead of the game, losing 1.1% from 95 to 97, after a gain of 15% from 93 to 95. So Slick Willie has left the poorest group in worse shape than he found them, notwithstanding historically low unemployment rates, but deciles 2, 3, and 4 are net gainers from 93 to 97. This suggests a politically-astute, morally craven sorting out of the electorate, a pattern we have come to expect from the Clinton Administration.

In closing, I'd remind people again that, as with defense cuts, welfare spending erosion pales before the proposed disposition of $100b-plus budget surpluses.

mbs



More information about the lbo-talk mailing list