Politics & Policy

A Stealth Expansion of the Welfare State

The Obama administration encourages states to spend more federal money.

Our national-security capabilities are set to implode next January. That’s when tens of billions of dollars in across-the-board cuts will take effect, hitting every Pentagon account with an immediate 10 percent cut. In the words of the Obama White House, these cuts will be “devastating” and “undermine our national security.”

The nation’s top military leaders agree. They have told Congress that over the course of the next decade, military spending would fall $1 trillion below what’s needed to keep us safe. The resultant reductions in operations, maintenance, and training would produce an “unacceptable level of strategic and operational risk.” The Navy will suffer a “severe and irreversible impact” (emphasis added). The Marine Corps will struggle to carry out even one major contingency operation. America will, once again, have a “hollow” military force, just as it did during the Carter era.

Next week, the House will vote on a proposal to forestall these cuts (along with scheduled cuts to some domestic programs). The proposal would restore the first year’s portion of the decade-long sequester, some $78 billion in defense and other spending, and would offset those expenditures within three years with reductions to various domestic programs that ultimately add up to $260 billion over the next decade.

Predictably, groups on the left have assailed the proposed cuts in domestic spending. “House Republicans,” one such criticism begins, “are asking low- and middle-income families to sacrifice health care and basic services to preserve redundant defense systems.” Specifically, they accuse Republicans of wanting to:

‐ “slash funding for child and elder abuse prevention, Meals on Wheels, and foster care.”

‐ “raise taxes on the families of 5.5 million low-income children,” and

‐ “force hundreds of thousands of working families to forgo health coverage.”

Such carping completely misses the point. Politicians routinely say they will reduce spending by eliminating “waste, fraud, and abuse,” but rarely do they identify the specific steps they will take to achieve that goal. This plan identifies four areas where Obama-administration officials, often in cahoots with liberal welfare-advocacy groups, have expanded the boundaries of the welfare state well beyond what Congress intended when it passed the relevant laws.

Here they are:

1. Forty states and the District of Columbia enable families to receive food stamps by sending them brochures funded through a federal welfare program (TANF) or referring them to a federal 800-number telephone hotline. (Federal law allows presumed beneficiaries of TANF to receive food stamps without meeting any further eligibility requirements.) Thirty-nine of these jurisdictions impose no asset test whatsoever when conferring these benefits; 27 allow food stamps to go to families with gross incomes above the approved federal poverty guidelines. Since food stamps are paid for with federal money, this costs the state governments almost nothing. Closing this loophole would save $11.7 billion over the next decade.

2. The so-called “heat and eat” loophole allows states to expand eligibility for food stamps by up to $130 per month simply by sending a family a $1 check from the Low Income Home Energy Assistance Program (LIHEAP). (The program is aimed at families whose heating/cooling bills are included in their rent, rather than being paid directly. By paying families a token $1 of heating/cooling aid, the state qualifies them as “fuel assistance households,” which entitles them to increased food-stamp allowances.) The savings here amount to $14.3 billion over a decade.

3. An anti-fraud proposal would simply require taxpayers to include their Social Security numbers on tax returns in order to claim the portion of their child tax credit that exceeds their overall tax liability. Savings: $7.6 billion over ten years.

4. When enacting Obamacare, Congress neglected to include a mechanism to recoup the excess subsidies taxpayers will receive from the new health-insurance exchanges. These excess payments can amount to thousands of dollars per year. This proposal would require full repayment of the excess. The savings here are enormous, amounting to a cool $43.9 billion over ten years.

In attacking these reforms, the Left is establishing a new and breathtaking precedent. In essence, they maintain that there should be no limiting principle to the modern welfare state. If you can identify a loophole, real or imagined, that creates millions of new wards of the state and shovels tens of billions of additional tax dollars into the cornucopia of welfare programs, the Left will defend it with no questions asked.

Unlike previous welfare-reform battles, where conservatives pursued statutory changes to place limits on program eligibility standards or benefit levels, this fight is simply about enforcing the agreed-upon contours of current law. In its opposition, the Left seeks to undermine the considered judgment of previous Congresses and let unelected bureaucrats rewrite federal welfare laws so that virtually anyone can qualify for federal benefits.

It is a battle well worth waging, not only because Congress needs to restore the irresponsibly damaging cuts to our national-security programs, but also because we cannot let the federal administrative state outflank Congress and expand our failed welfare state through stealth and deception.

— Michael G. Franc is vice president of government studies at the Heritage Foundation.


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