Senator’s welfare statement doesn’t add up
“Converted to cash, we spend enough on federal welfare to mail every household living beneath the poverty line a check for $60,000 each year.”
— Sen. Jeff Sessions (R-Ala.),
Budget Committee hearing, Feb. 13
Sessions’s statement is derived from his calculation that what he describes as some 80 “welfare programs” make up the singlelargest item in the federal budget — larger than Social Security, Medicare or Defense Department spending. Building on that calculation, he has also touted a chart that claims that total welfare spending “equates” to $168 per day for every household in poverty, compared with median income of $137 a day per household — a 20 percent gap.
Sessions comes up with his list of 80 welfare programs from an October 2012 report by the Congressional Research Service, titled “Spending for Federal Benefits and Services for People with Low Income.” The report concluded that the federal government spent $746 billion on such programs in fiscal 2010; state contributions boost the figure to about $1 trillion.
The CRS, however, included a number of caveats, warning that “there is no single label that best describes all programs included in this report.”
Sessions, in his statement, ignores such caveats and simply declares all such spending as “welfare.” As his spokesman, Stephen Miller, put it: “The caveats are frankly preposterous.”
That’s a matter of opinion, and Sessions certainly is trying to shake up traditional notions of what constitutes welfare. But do his calculations add up?
We had long discussions with Sessions’s staff members about the $168 figure, which they contend is mathematically correct and intended to illuminate the money now spent by the federal government on low-income people. But we have some serious problems with both the numerator and denominator in this calculation.
First, health-care spending, especially Medicaid, makes up nearly 50 percent of the total figure. But a majority of Medicaid spending goes to the elderly and disabled, not families with children.
Moreover, health-care spending is different from food stamps or the earned income tax credit in that such aid generally does not add to a family’s income level; instead, such assistance helps pays for bills that are the direct result of how sick or disabled a patient is. (That’s why so much of Medicaid spending is directed to the elderly in the last years of life.)
“Medicaid is a federal program that is intended to provide health-care services to people who are poor or nearpoor,” responded a Sessions aide. “It also provides health benefits to sick people, but those people must first meet certain income criteria (and in some cases an asset test) in order to qualify for the benefit.”
Still, while the chart compares what Sessions terms welfare spending to median income, the Census Bureau does not include health benefits (such as employer-provided health care) in that calculation, even though such benefits account for half of the welfare side of the ledger. So, he’s really comparing apples and oranges.
Finally, Sessions adds up many means-tested programs, which are aimed at people with low incomes, but then divides the figure by the number of people under the poverty level — even though millions of people above the poverty level receive these benefits. That also significantly gooses up the figure for spending per household.
At first glance, many might assume that Sessions is saying this is how much money is given to each household under the poverty line. Sessions’s staff fiercely disputed that, noting that the chart says “equates,” which they say indicates it is not claiming that this money is spent only on people below the poverty line.
But that impression is certainly left, particularly given the way Sessions discussed the figure at the hearing: “We spend enough on federal welfare to mail every household living beneath the poverty line a check for $60,000 each year.”
In testimony before the House Budget Committee in 2012, Robert Rector of the Heritage Foundation said that simply dividing the means-tested spending by the number of the poor “can be misleading because many persons with incomes above the official poverty levels also receive means-tested aid.” In an interview, he said the GOP staff of the Senate Budget Committee does good work in this area, but it would be better to divide the total by the number of people — more than 100 million — receiving meanstested benefits.
The Congressional Budget Office, in a report this month, had an even more nuanced approach, estimating the average federal spending per household in 2006 for the 10 largest meanstested programs (worth about 75 percent of Sessions’s total) by different income quintiles. For the lowest quintile, the figure is nearly $9,000, after adjusting to 2012 dollars.
In both cases, when a more discreet approach was taken, the headline number shrinks.
Miller said our conclusions are “disappointingly antiintellectual, appealing to sentiment over reason.” He defended Sesssions’s calculations as “honest, accurate and, most importantly, a constructive step towards helping those in need.”
The Pinocchio Test
Sessions — who says he went to college on Pell grants, which he lists as a welfare program — clearly wants to jar some of the conventional wisdom about antipoverty programs. Calling attention to their cost and questioning their effectiveness are certainly worthy endeavors for a lawmaker.
But he runs into trouble with his chart and the shorthand description he gave at the hearing. The comparison to medium income is specious, given that it does not include health-care benefits, while the cost per household appears inflated, given that the programs he lists cover a whole range of programs that assist more than just those in poverty.
We wavered back and forth between two and three Pinocchios, but the apples-and-oranges comparison to median income tipped it to three.