Total Welfare Spending Now at $1 Trillion

by NRO Staff

Total annual spending on means-tested programs has hit $1 trillion. The Congressional Research Service is out with a new memorandum on spending on these programs. Senator Jeff Sessions, the ranking Republican on the Senate budget committee who requested the memo, has crunched the numbers and come up with the astonishing figure of $1 trillion in annual total spending on these programs as of fiscal year 2011, nearly $750 billion in federal dollars and another roughly $250 billion in state funding. Senator Sessions explains:

Ranking Member Sessions and the minority staff of the Senate Budget Committee requested from the nonpartisan Congressional Research Service (CRS) an overview of cumulative means-tested federal welfare spending in the United States in the most recent year for which data is available (fiscal year 2011). The results are staggering. CRS identified 83 overlapping federal 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 80-plus federal welfare programs amounts to roughly $1.03 trillion. Importantly, these figures solely refer to means-tested welfare benefits. They exclude entitlement programs to which people contribute (e.g., Social Security and Medicare).

CRS estimates that exclusively federal spending on these federal programs equaled approximately $746 billion, and further emphasizes that there is a substantial amount of state spending—mostly required as a condition of states’ participation—on these same federal programs (primarily Medicaid and CHIP). Based on data from the Centers for Medicare and Medicaid Services and the Oxford Handbook of State and Local Government Finance, Budget Committee staff calculated at least an additional $283 billion in state contributions to those same federal programs,1 for a total annual expenditure of $1.03 trillion. By comparison, in 2011, the annual budget expenditure for Social Security was $725 billion, Medicare was $480 billion, and non-war defense was $540 billion.

The exclusively federal share of spending on these federal programs is up 32 percent since 2008, and now comprises 21 percent of federal outlays (this share too is more than Social Security, Medicare, or defense).

As a historical comparison, spending on the 10 largest of the 83 programs (which account for the bulk of federal welfare spending) has doubled as a share of the federal budget over just the last 30 years. In inflation-adjusted dollars, the amount expended on these 10 programs has increased by 378 percent over that time.

Many factors have contributed to the growth in federal welfare spending, causing it to rise during times of both high and low unemployment. Persistently weak GDP growth over the last several years is unquestionably a factor in the record amount of money now being spent. But understanding the growth in federal welfare expenditures must also be understood in the context of a federal policy that has explicitly encouraged growth in welfare enrollment—combined with a weakening of welfare standards and rules. 

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