Budget Background


A congressional report from CRS recently revealed that the United States now spends more on means-tested welfare than any other item in the federal budget—including Social Security, Medicare, or national defense. Including state contributions to the roughly 80 federal poverty programs, the total amount spent in 2011 was approximately $1 trillion. Federal spending alone on these programs was up 32 percent since 2008.

The U.S. Census Bureau estimated that almost 110 million Americans received some form of means-tested welfare in 2011. These figures exclude entitlements like Medicare and Social Security to which people contribute, and they refer exclusively to low-income direct and indirect financial support—such as food stamps, public housing, child care, energy assistance, direct cash aid, etc. For instance, 47 million Americans currently receive food stamps, and USDA has engaged in an aggressive outreach campaign to boost enrollment even further, arguing that “every dollar of SNAP benefits generates $1.84 in the economy… It’s the most direct stimulus you can get.” (Economic growth, however, is weaker this year than the two years prior, even as food stamp “stimulus” has reached an all-time high.)

Were the $1 trillion spent on federal welfare programs converted into cash and divided exclusively among the 16.8 million households who lived beneath the federal poverty line last year, the government would be able to mail each of those households an annual check for $60,000. This figure underscores the fragmented, inefficient nature of welfare in this country, as well as the need for sound, compassionate reforms to better assist struggling Americans and help those living in poverty successfully rise out of it.

To better understand the welfare budget, it is useful to look at the four largest segments of federal welfare (excluding state contributions):

  • Low-Income Health Care Programs: Approximately $340 billion. The largest expense in this category is Medicaid.
  • Direct Cash Aid: Approximately $145 billion. The largest item here is Supplemental Security Income, which is direct cash support. This category also includes cash assistance from TANF.
  • Food Assistance: Approximately $100 billion. The largest item here is food stamps. Overall, there are 15 food assistance programs to supplement household income.
  • Housing & Social Services: Approximately $90 billion. The largest item here is federal housing vouchers. Other programs include home energy assistance, child care, non-cash TANF support, rental assistance, and grants to states for low-income housing.