Swelling Welfare Rolls Are a Sure Sign That Recovery Never Happened
What does President Obama plan to do to slow or stop the explosive growth in the number of Americans who count on regular welfare checks from the federal government?
Does he consider the expansion of dependent households a positive achievement for his administration or a threat to the long-term vigor of the economy?
These distinctly uncomfortable questions pose a potent threat to an embattled administration already struggling to defend its record of economic management and to secure the president’s reelection. All answers to such challenges would force Barack Obama into untenable political territory and require open admission of glaring and costly failure.
Official figures leave no doubt as to the alarming rise in federal welfare payments since the president took the oath of office in January 2009. The Survey of Income and Program Participation from the U.S. Census Bureau showed that by the end of 2011, nearly 110 million individuals lived in households that received benefits—an increase of 13 million in the first three years of the Obama presidency. This number excludes those who only benefit from Social Security and Medicare—a population that could easily add 50 million to the tally and swell the total to an actual majority of the overall population. The 2011 figures also exclude the new recipients of health insurance premium subsidies under the president’s madly misnamed “Affordable Care Act”—projected by the Congressional Budget Office as at least 25 million more individuals between 2014 and the end of the decade.
The two most costly federal assistance programs, Medicaid and food stamps, registered the most dramatic growth in recent years. Between 2000 and 2011, the count of individuals covered by Medicaid expanded from 34 million to 54 million people. In the same period, recipients of food stamps under SNAP (Supplemental Nutrition Assistance Program) almost tripled, from 17 million to 45 million, reaching a yearly cost of $80 billion. In each one of Barack Obama’s first three years as president, the food stamps rolls grew by at least 5.5 million—the top three growth years in all of the program’s 40 year history.
Not even the most open-hearted (and empty-headed) idealist could look at these developments as a healthy sign for our society. As Harvard historian Niall Ferguson writes in his stinging Newsweek cover story arguing against an Obama second term, “Welcome to Obama’s America: nearly half the population is not represented on a taxable return—almost exactly the same proportion that lives in a household where at least one member receives some type of government benefit. We are becoming the 50—50 nation—half of us paying the taxes, the other half receiving the benefits.”
If the president succeeds in securing another four-year lease on the White House, what does he propose to do to stop the unchecked expansion of the dependent population and to prevent productive providers from becoming a distinct minority in the nation at large?
If he responds with claims that economic growth will automatically lighten the welfare burden and deliver tens of millions from reliance on federal benefits, then he openly acknowledges that his own much-touted recovery has fallen far short of the administration’s claims. The “Great Recession” ended officially in June 2009, and the president boasts incessantly of creating more than four million new jobs, but the government rolls show dependency growing rather than declining in every year of his presidency.
The administration could cite the Clinton administration as a model for reducing the cost of federal benefit programs, but history suggests that the positive changes of the late 90s reflected the tightening of eligibility standards in the sweeping 1996 welfare reform at least as much as the impact of admirable economic growth.
And if the president tried to replicate those reforms and to embrace the goal of cutting back on food stamps, Medicaid and other programs aimed at sustaining the downtrodden, he would surely enrage his progressive base—which believes that spending for “social justice” represents the highest possible use of taxpayer money.
At the same time, he’d commit himself to a striking change of course while effectively repudiating one of the proudly pursued goals of his first term. From the beginning, the Obama administration has openly recruited new beneficiaries for federal welfare programs, investing hundreds of millions in ads and outreach to eliminate any stigma attached to dependency while acquainting “under-served populations” (including non-citizens) of their eligibility for government checks. This year, the Department of Agriculture enthusiastically promoted “SNAP Parties” in cities and rural communities across the country where citizens could invite their less enlightened friends and neighbors to learn about the glorious, guilt-free joys of food stamps.
Of course, the president could always use a second term to double-down on such initiatives and, in the name of compassion, endorse the continued rapid expansion of federal benefit programs that characterized his first four years in office, playing a significant role in his vaunted Stimulus Package.
But the nation’s perilous fiscal situation makes more of such sharply increased expenditures virtually impossible, even if the Congress unexpectedly agreed to the tax hikes that President Obama has demanded. Elimination of the Bush tax cuts for all households earning more than $250,000 per year would produce at most $800 billion over the next 10 years—just barely enough to cover the cost of the food stamp program alone, assuming no big new benefit increases, with no contribution at all to soaring costs of Medicaid and other welfare programs, let alone deficit reduction.
Challenging the president on the future of the benefit programs he has already vastly expanded forces a necessary confrontation on contrasting visions for the future.
Polling suggests that big majorities strongly reject the idea of endless increases in the benefit-reliant population. Even those voters whose self-interest or instinctive generosity produces visceral support for such initiatives can recognize their perpetual expansion as an undeniable indicator of inept economic leadership and a failed recovery.
Mitt Romney and Paul Ryan are well-positioned to push the issue of deepening dependency in the four upcoming televised debates (three of them involving the presidential candidates and the most dramatic confrontation of them all between policy-wonk Ryan and the hapless, unpredictable Joe Biden).
They should ask: do we need to take more in taxes, and borrow more money from the Chinese, to provide ever more in benefits? Or do we need to reduce the cost of those benefits—or, at the very least, freeze them at their current levels—to reduce a crushing deficit that impedes economic growth?
The government currently spends more than $32,000 a year for each American household, nearly half of it borrowed and added to the devastating debt already imposed on our children and grandchildren. Even voters who remain apathetic about the presidential personality contest that absorbs pundits and the press can understand what these sums of misspent money mean to the fate of their families.