‘Welfare Spending Equates to $168 Per Day for Every Household in Poverty’

by DANIEL HALPER, The Weekly Standard  |  published on December 7, 2012

The amount of money spent on welfare programs equals, when converted to cash payments, about “$168 per day for every household in poverty,” the minority side of the Senate Budget Committee finds.

According to the Republican side of the Senate Budget Committee, welfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.

“Based on data from the Congressional Research Service, cumulative spending on means-tested federal welfare programs, if converted into cash, would equal $167.65 per day per household living below the poverty level,” writes the minority side of the Senate Budget Committee. “By comparison, the median household income in 2011 of $50,054 equals $137.13 per day. Additionally, spending on federal welfare benefits, if converted into cash payments, equals enough to provide $30.60 per hour, 40 hours per week, to each household living below poverty. The median household hourly wage is $25.03. After accounting for federal taxes, the median hourly wage drops to between $21.50 and $23.45, depending on a household’s deductions and filing status. State and local taxes further reduce the median household’s hourly earnings. By contrast, welfare benefits are not taxed.”

The universe of means-tested welfare spending refers to programs that provide low-income assistance in the form of direct or indirect financial support—such as food stamps, free housing, child care, etc.—and which the recipient does not pay into (in contrast to Medicare or Social Security). For fiscal year 2011, CRS identified roughly 80 overlapping federal means-tested welfare programs that together represented the single largest budget item in 2011—more than the nation spends on Social Security, Medicare, or national defense. The total amount spent on these federal programs, when taken together with approximately $280 billion in state contributions, amounted to roughly $1 trillion.

Nearly 95 percent of these costs come from four categories of spending: medical assistance, cash assistance, food assistance, and social / housing assistance. Under the President’s FY13 budget proposal, means-tested spending would increase an additional 30 percent over the next four years.

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