U.S. Welfare Programs, the Myths vs. the Facts
The 6 Major Welfare Programs
Welfare programs are government subsidies for low-income families and individuals. Recipients must prove their income falls below a target, which is some percentage of the federal poverty level. In 2021, the poverty level for a family of four is $26,500.
There are six major U.S. welfare programs. They are the Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Nutrition Assistance Programs (SNAP or "food stamps"), Supplemental Security Income (SSI), Earned Income Tax Credit (EITC), and housing assistance.
- The six major welfare programs are EITC, housing assistance, Medicaid, SNAP, SSI, and TANF.
- These welfare programs differ from entitlement programs like Medicare and Social Security.
- Many negative perceptions about the people receiving welfare benefits aren't rooted in fact.
Welfare Funding in the United States
The federal government provides funding for welfare programs, but the states administer the programs. Some states also expand the programs by providing additional funds.
Welfare programs are often debated in Congress. It's not unusual for Congress to consider reducing the funding for a program that already exists.
If Congress reduces funding for a program without also reducing the state's responsibilities for that program, it creates what's known as an unfunded mandate. States and local governments usually end up picking up the rest of the tab for the program, though certain kinds of unfunded mandates can also fall on the private sector. For example, the federal government pays for SNAP benefits, but states pay half of the cost of administering the program.
Welfare vs. Entitlement
Each welfare program has its own set of eligibility requirements, but they will all include a maximum income requirement. These income requirements are usually set at the state level and determined as a percentage of the federal poverty level. For example, an Illinois resident would not qualify for SNAP benefits if their household makes more than 165% of the federal poverty level.
Maximum income levels may fluctuate, depending on other circumstances in the household. To stick with the Illinois SNAP example, households that include anyone who's disabled or older than 60 have a higher maximum income level—up to 200% of the federal poverty level.
These maximum income levels are part of what makes welfare programs different from entitlement programs. While you have to prove eligibility to receive welfare program benefits, everyone is entitled to entitlement programs if they have contributed to the program (often through payroll taxes). Even the richest Americans can receive Medicare coverage, for example, once they turn 65.
The four major U.S. entitlement programs are Social Security, Medicare, unemployment insurance, and worker's compensation.
Temporary Assistance for Needy Families (TANF)
While many programs are technically welfare programs, the Temporary Assistance for Needy Families program is the one you may hear simply referred to as "welfare." In June 2020, TANF provided income to more than 2.1 million Americans. Most TANF recipients are children. The June 2020 figures include 505, 487 adults and over 1.6 million children.
While those may seem like high numbers, they represent just a fraction of American families living in poverty. In 2019, for instance, only 23% of the families with children living in poverty received TANF assistance, according to the Center on Budget and Policy Priorities. In 2020, the national median monthly assistance for a family of three with TANF benefits was $492 per month.
TANF's predecessor was known as the Aid to Families with Dependent Children (AFDC). The AFDC was created in 1935 as part of the Social Security Act, but it later came under scrutiny.
Public perception of welfare, then officially known as the AFDC, soured significantly in the '70s.In 1976, President Ronald Reagan's campaign highlighted a case of welfare fraud and popularized the concept of a "welfare queen." He pushed for welfare reforms and warned of how welfare created a cycle of poverty. In 1996, President Bill Clinton created TANF as a replacement for AFDC, officially ending the original welfare system.
Medicaid and the Child's Health Insurance Program (CHIP)
In September 2020, Medicaid helped pay for the care of more than 77 million low-income adults and children.
Children have a specialized form of Medicaid called the Child's Health Insurance Program (CHIP). It covers hospital care, medical supplies, tests, and preventive care, such as eye exams, dental care, and regular check-ups.
Medicaid pays for a significant portion of U.S. births. Not every state reports this data, but among the states that do, the rate of Medicaid-funded births commonly fall between 30% and 50%. The highest figure came from New Mexico, which reported that Medicaid funded 71% of births in 2018. The lowest figure came from New Hampshire—just 26%, also reported in 2018.
Supplemental Nutrition Assistance Program (SNAP)
SNAP is more commonly known as food stamps. The food voucher system helped more than 39 million people buy food in 2020. The average individual received $155.09 a month. The total federal cost for SNAP was $74.2 billion.
The average individual received $155.09 a month from SNAP in 2020. The total federal cost for the program was $74.2 billion.
In addition to SNAP, the Special Supplemental Food Program for Women, Infants, and Children (WIC) provides food, vouchers, education, and referrals to help feed pregnant, postpartum, and breastfeeding women and children up to age five. In 2018, roughly 6.87 million people received WIC benefits. Of those, more than 76% were children or infants.
Another food-based welfare program is known as the Child Nutrition Program. In 2019, this program provided free or reduced-cost lunches to 29.4 million children costing the federal government $14.1 billion. These government food benefits can really help families in need.
Supplemental Security Income (SSI)
Supplemental Security Income provides extra cash to help low-income adults and children who live with disabilities. As of January 2021, more than 7.9 million people received an average of $585.53 per month. Of those, more than 6.7 million were blind or disabled.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit is a tax credit for low-income families. For the tax year 2020, a family of four (in which couples are married and filing jointly) must have earned less than $53,330 a year to qualify for a potential tax credit of $5,920. More than 22 million individuals and families received EITC in 2018. The average credit for a family with children was worth $3,191. The credits lifted approximately 5.6 million people out of poverty in 2018, 3 million of whom were children.
Housing assistance often takes the form of rental assistance. It includes 1.2 million units of public housing, privately owned subsidized housing units, and a voucher program that allows low-income renters to find their unit. The Housing Choice Voucher Program aims to ensure that low-income families spend no more than 30% of their income on rent. Local agencies administer it to 2.2 million families.
The Low-Income Home Energy Assistance Program is a similar welfare program that provides energy assistance and weatherization programs. Congress allocated $3.36 billion in block grants to the states for implementation of this program in 2021.
Myths About Welfare Programs
A 2018 Rasmussen Reports survey found that 61% of Americans believe that too many people are dependent on government financial aid. Many of these respondents may not realize that they—themselves—benefit from federal assistance given to their state governments.
There are many misconceptions about who exactly benefits from federal aid. In 2012, for instance, Republican presidential candidate Mitt Romney said that 47% of the population would vote Democrat no matter what. He claimed this 47% of Americans vote Democrat because they "are dependent upon government" and don't want to see a reduction in welfare programs.
However—digging into the facts on who receives federal benefits and how they vote—one can quickly dispel this myth. In an interview with Vox, political scientist Suzanne Mettler said her research shows that welfare and food stamp recipients are far less likely to vote than others. They struggle so much to make ends meet, and they don't have the extra time to read up on political issues and go to the polls. Furthermore, the Tax Foundation and Gallup polls research shows that many of the states that rely the most on federal benefits vote Republican.
Many of the voters who decry welfare programs may not be aware of how dependent they are on government programs. For example, they may not be aware that the deduction for home mortgage interest is a form of government benefit. It's easier only to consider visible federal benefits, such as welfare checks or food stamps. As a result, some voters don't think the government has done much for them.
Another myth accuses undocumented immigrants of coming to the U.S. to take advantage of welfare programs. However, most welfare programs only benefit legal immigrants. Even among legal immigrants, they must have a 10-year work history or be a member of the military before they are eligible to receive TANF, for instance. Other welfare programs have similar restrictions.
The only federal welfare program that benefits undocumented immigrants is Medicaid. Even then, the benefits are only allowed in cases of emergency. Kaiser Health News estimates that roughly $2 billion goes to hospitals every year to reimburse them for emergency room costs that are largely associated with undocumented immigrants.
The Bottom Line
The United States has six major welfare programs with eligibility based on income and local poverty levels. There are other eligibility requirements, as well, depending on the program in question. However, all six programs do take income levels into account.
Understanding the true scope of these programs can be difficult since most of the benefits don't come directly to recipients in the form of checks. Instead, they may be applied individually as tax credits, or they may be more broadly distributed to the public in federal grants to states and local municipalities.
Regardless of where the money is going or who is benefitting, welfare programs make up a significant portion of the U.S. federal budget. As such, Americans can expect debates over funding levels and implementation to continue for a long time.