Posts tagged with: Federal assistance in the United States

basic-income-guaranteed-and-minimum-wage_thumb1For decades conservatives and libertarians have pondered ways to replace the defective American welfare state. One of the boldest and most controversial ideas is to simply give everyone a basic guaranteed income. Instead a variety of ad hoc welfare programs, people would simply be given cash.

Matt Zwolinski outlines an example proposal that includes an unconditional cash grant — no strings attached. Just give people cash and leave them “free to spend it, or save it, in whatever way they choose.” Zwolinski outlines a number of benefits we could gain by replacing welfare programs with a guaranteed income.
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“You are a slow learner, Winston.”
“How can I help it? How can I help but see what is in front of my eyes? Two and two are four.”
“Sometimes, Winston. Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once. You must try harder. It is not easy to become sane.” – George Orwell, 1984

In a calculation that surely qualifies as “new math,” the government has created an equation in which $29,000 is equal to $69,000. Within the current welfare structure a single mother is better off making $29,000 per year in income and subsequent welfare benefits, than she is making $69,000 per year in income alone. This perverse incentive is what perpetuates the cycle of poverty and condemns impoverished moms to dependence on a paternalistic state. Social Security, Medicare, Medicaid, and SNAP (food stamps) are all larger than ever before with no subsequent reversal in the level or scope of poverty.

The “Welfare Cliff,” an economic model developed by Gary Alexander, the Secretary of Public Welfare in Pennsylvania, shows the amount of net income a person would need to receive in order to match their current net income plus welfare benefits. This is called a cliff, as there are drastic drop-offs in welfare benefits as one increases their income. In this graph, “the single mom is better off earning gross income of $29,000 with $57,327 in net income and benefits than to earn gross income of $69,000 with net income & benefits of $57,045.” In fact, if a single mother were to raise her income from $29,000 to just $30,000, she would lose nearly $10,000 in welfare benefits per year.

The incentives provided under this system replace the desire for individual development with the maintenance of the status quo.  A single mother is highly unlikely to spend the time, effort, or capital in order to gain skills that result in receiving a lower disposable income. (more…)

pills and billsWhile Michelle Obama grows vegetables in the White House garden, her husband’s administration grows every government program it can. At The Federalist, Sean Davis gives 12 reasons why Medicaid should not be expanded.

Since Medicaid is a health care program, we should see some improvements in American’s health, right? Not so, and this is Davis’ first reason why we should not consider expanding this program.

According to an extensive, randomized study of people who enrolled in Oregon’s 2008 Medicaid lottery, Medicaid doesn’t improve the health outcomes of its patients, even after controlling for major health predictors like income and pre-existing health status. The researchers tracked the health progress of people who were admitted into the program and who people who applied but did not get selected by the lottery. According to the researchers, one of whom helped craft Obamacare, while the program led to people using more health services, those services didn’t actually make them physically healthier…

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“Today’s welfare state is largely the construction of decades of liberal political activism,” writes James C. Capretta. “If it is failing, and there is strong evidence that it is in many ways, then that is a stinging indictment of the liberal governing philosophy more than anything else.” He argues for more conservative activism on the poverty problem, particularly in education.

An effective conservative critique of existing policies starts with the acknowledgement that a strong social safety net is a must in a modern, market-based economy, and that the safety net built here in the United States, though flawed, has contributed substantially to improving the conditions for the poor. The official measure of the poverty rate is completely misleading in this regard because it does not include transfer programs or the taxes people pay in the measure of income. So, in a very real sense, no matter how much the government spends, the official poverty rate remains unchanged.

But when tax and transfer programs are factored into the assessment, and when the consumption patterns of the poor are examined and not just their cash incomes, the picture changes quite dramatically. The panoply of governmental support programs—Medicaid, Food Stamps, the earned income tax credit, housing vouchers, school lunch programs, and many more—substantially raise the living standards of those who otherwise have very low incomes. (more…)

snapMichael Tanner of the Cato Institute released a recent policy analysis that raises important questions about whether or not we should completely re-conceptualize how to provide food for the truly disadvantaged. In “SNAP Failure: The Food Stamp Program Needs Reform” Tanner argues The Supplemental Nutrition Assistance Program (SNAP) is currently crippled by high administrative costs, significant fraud and abuse, and weakening of standards. Tanner notes that SNAP breeds greater dependence on government, and, even worse, seems to have negligible long-term effectiveness in eliminating food deficiencies for the truly disadvantaged.

The statistics are overwhelming. Using primarily government data, Tanner observes that the poverty is politicized in Congress through the framing of food stamps as fulfilling two separate goals—“improved levels of nutrition” and “strengthening the agricultural economy.” This created the “bipartisan” support that has exploded funding and served the interests of both political parties. Everybody wins, except for the poor. According to Tanner, “Since 2000, spending on SNAP increased from just $17 billion per year to more than $78 billion in 2012, a greater than fourfold increase.” The increase in spending cannot even be blamed on the recession. According to Congressional Budget Office (CBO) estimates, 35 percent of the program’s growth from 2007 to 2011 was not a result of economic factors in the country.

The factors that have created the expansion include:
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Blog author: jcarter
Wednesday, August 21, 2013
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welfareIn eleven states in the union, welfare pays more than the average pretax first-year wage for a teacher. In thirty-nines states, it pays more than the starting wage for a secretary. And, in the three most generous states a person on welfare can take home more money than an entry-level computer programmer.

Those are just some of the eye-opening and distressing findings in a new study by Michael Tanner and Charles Hughes of the Cato Institute on the “work versus welfare tradeoff.”

“Welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job, and the balance between welfare and work may actually have grown worse in recent years,” say Tanner and Hughes. “The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour.”

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It’s no secret that the number of people receiving food stamps in the U.S. has exploded in the past few years. Not only is it easier than ever to get food stamps, the government actively recruits people to sign up. Is there waste? Are your tax dollars being used wisely? Fox News thinks not.

In a recent series called “The Great Food Stamp Binge”, reporter John Roberts spent some time with a young, healthy surfer in California. His reason for being on food stamps? Watch and see.

The Circle of Protection radio advertisements being broadcast in three states right now make their arguments, such as they are, from a quotation of the Bible and a federal poverty program that might be cut in a debt ceiling compromise. But the scriptural quotation is a serious misuse of the Book of Proverbs, and the claims about heating assistance programs are at best overblown: the ads are really no better than their goofy contemporary piano track.

The Circle of Protection, of which the group Sojourners that produced the ads is a founding member, enjoyed the high honor of a meeting at the White House last week, which was supposed to be about the debt ceiling crisis and which poverty programs are in danger. But they came away without even discovering President Obama’s thoughts on the program they were about to feature in a radio campaign.

LIHEAP, the federal heating assistance program Sojourners wails about, doesn’t even have the blessing of the President. The program’s $5 billion budget is twice what it needs to be, he said in February. What the President knows, but can’t say publicly, is that LIHEAP is a waste- and fraud-ridden program operating with exactly the kind of money-is-no-object attitude that precipitated the debt ceiling crisis. Believe it or not, one hundred percent of the fraudulent applications for heating assistance made during a Government Accountability Office investigation were approved.

And not only is the program inefficient, it is actually redundant. As the Heritage Foundation has pointed out, state laws prohibit energy companies from turning off the poor’s heat in the winter, so LIHEAP funds simply go to utility companies that wouldn’t have otherwise collected their fees. Sojourners set up the $2.5 billion in LIHEAP cuts against $2.5 billion in “tax breaks for oil companies.” I don’t see the towering social injustice there, but Sojourners seems to think that energy utilities are eminently more deserving of federal largess than oil companies.

The more serious distortion is the group’s misuse of the Book of Proverbs, with which they begin their ads. “The Book of Proverbs teaches that ‘where there is no leadership, a nation falls’ and ‘the poor are shunned, while the rich have many friends,’” intones Pastor Tom Jelinek at the beginning of the Nevada ad. He is actually quoting two different chapters in Proverbs—eleven and fourteen—which I have indicated by the use of quotation marks. There is no such indication in the radio ad, however: he continues right from chapter eleven to chapter fourteen as if the two passages were one. That is what we call deceitfulness, and it’s best kept out of discussions of Sacred Scripture.

The effect of the deception is that Proverbs’ statement about the poor and the rich seems quite clearly a political one, which in the context of chapter fourteen it is not (unless, like the Circle of Protection, you think that religion exists to serve politics). The surrounding verses say nothing of “nations” or “leaders,” so Sojourners went back to chapter eleven to establish their interpretation. “The poor man shall be hateful even to his own neighbor: but the friends of the rich are many,” reads Proverbs 14:20, and the message is super-political. The wise man of chapter fourteen will be mindful of this friendship gap, and tend to the needs of the poor, who often lack the social safety net of the rich. But the verse is certainly not an anachronistic call to bureaucratic political action.

How ironic. Sojourners, blinded by its own topsy-turvy approach to religious engagement in political debate and reading the Bible as a political document, didn’t see that the verse they were going to quote is an exhortation to private charity. And by welding the verse to another one from another chapter, all the while pretending that they are quoting a singular passage, the group imposes that false interpretation upon radio listeners. I am not suggesting that the trick is deliberate, for how could an organization that sees the Church as the bride of Caesar understand that the Bible is more than a manual for the curing of earthly injustice?

That the ads sound like the work of a Washington PR firm ought to alert listeners to the inherent disorder of the Circle of Protection message. Political activity must be inspired by an evangelical spirit, and when instead the use of Sacred Scripture is inspired by political ends, the Gospel is profaned.