U.S. Welfare Programs, the Myths Versus the Facts

There are 6 major welfare programs

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Welfare programs are government subsidies to the poor. Recipients must prove their income falls below a target, which is some percentage of the federal poverty level. In 2018, that's $25,100 for a family of four.

Welfare Programs in the United States

There are six major U.S. welfare programs. They are Temporary Assistance for Needy Families, Medicaid, Food Stamps, Supplemental Security Income, Earned Income Tax Credit, and Housing Assistance.

The federal government provides the funding, while states administer them and provide additional funds. When the federal government reduces funds without lowering the states' responsibilities, it creates an unfunded mandate. For example, the 1998 reduction in food stamp administration costs added $5 million to state budgets. 

Welfare programs are not entitlement programs. Those base eligibility upon prior contributions from payroll taxes. The four major U.S. entitlement programs in the United States are Social Security, Medicare, unemployment insurance, and worker’s compensation. Instead, welfare programs are based on a family's income. To qualify, their income must be below an income based on the federal poverty level.

On April 10, 2018, President Trump signed an executive order directing federal agencies to review work requirements for many welfare programs. The programs include TANF, Medicaid, food stamps, and housing assistance. Trump wants agencies to standardize work requirements between programs and states.

For example, food stamp recipients must find a job within three months or lose their benefits. They must work at least 80 hours a month or participate in job training. But several states, such as Alaska, California, and Nevada, have opted out of the work requirement. They say unemployment rates are too high. The executive order encourages agencies to make sure all states follow the same rules.

The Six Major U.S. Welfare Programs Myths Versus Facts

TANF is the Temporary Assistance for Needy Families program. Most people refer to this program as welfare. On average, TANF provided income to 2.5 million recipients in 2017. Of these, 1.9 million were children.

In 2016, TANF assisted only 23 percent of the families living in poverty. On average, a three-person family received $447 a month. Despite this help, they still live below the poverty line.

Welfare received a bad reputation due to President Reagan's 1976 presidential campaign. He portrayed the welfare queen who cheated the system to get enough benefits to drive a Cadillac. He also warned of how welfare created a cycle of poverty. As a result, 61 percent of Americans believe the government should provide jobs instead of welfare payments.

Fraud like Reagan described has been cut since 1996. That's when President Clinton created TANF out of the ashes of Aid to Families with Dependent Children. The number of families "on the dole" dropped from 10 million before welfare reform to 1.9 million in 2017.

The new requirements were the reason for this decrease. Families who receive TANF must get a job within two years. They might not get more money if they have another child. They can own no more than $2,000 in total assets. They can only receive TANF for five years or less in some states.

Medicaid paid for health care for 64.9 million low-income adults in 2014. The largest share, which was 50 percent, went to 29.5 million children. Next, it covered 19.2 million adults, mostly parents of these children. It pays for 40 percent of all U.S. births.

Medicaid also paid health expenses for 9.8 million blind and disabled people. The smallest category was 5.4 million low-income seniors. It paid for any health costs that Medicare didn't cover.

The Affordable Care Act increased Medicaid coverage by 28 percent. It raised the income level and allowed single adults to qualify.

Child's Health Insurance Program. In addition to Medicaid, 6 million children received additional benefits from CHIP. It covers hospital care, medical supplies, and tests. It also provides preventive care, such as eye exams, dental care, and regular check-ups.

Food Stamps is the Supplemental Nutrition Assistance Program. It gives food vouchers to 47.6 million people or 23 million households. They receive $133 a month on average. The total federal cost is $79.9 billion, of which $3.8 billion is administration.

There's an additional food stamp program for nursing mothers and young children. The Special Supplemental Food Program for Women, Infants, and Children provides food or vouchers, education, and referrals to help feed pregnant women and children up to age six. In 2017, 7.7 million people received WIC each month. Of those, more than 75 percent were children or infants. ("WIC FAQ" U.S. Department of Agriculture. for 2013)

The Child Nutrition Program provides free or reduced-cost lunches to 30 million children. It costs the federal government $12 billion.

Supplemental Security Program provides cash to help the aged, blind, and disabled to buy food, clothing, and shelter. On average, roughly 8.4 million people receive $536 per month. Of those, 7.3 million are blind or disabled.

Earned Income Tax Credit is a tax credit for families with at least one child. They must earn less than $51,567 a year to qualify. In 2012, over 27 million received credits totaling $63 billion. That's a little more than $2,335 per taxpayer. EITC lifted 6.5 million people out of poverty, half of whom were children. It costs just 1 percent of the amount paid out to administer it. Unfortunately, almost one-fourth of the payments are in error. An unknown amount is fraudulent.

Housing Assistance is provided by 1.2 million units of public housing. The Housing Choice Voucher Program gives certificates to rent approved units. The subsidy allows them to pay no more than 30 percent of their income. Local agencies administer it to 2.2 million renters. This is the old Section 8 program. The Public Housing Agency allows​ some families to use the voucher to purchase a modest home.

The Low-Income Home Energy Assistance Program provides energy assistance and weatherization programs. It provides $3.4 billion in block grants to the states.

Myths About Welfare Programs in General

A 2018 Rasmussen Report survey found that 61 percent of Americans believe that too many people are dependent on government financial aid. Ironically, many of those with this belief live in states that receive the most aid. This disconnect is because the states receive aid in the form of federal contracts, grants, and tax cuts. The residents don't realize that they themselves are benefiting from aid to their state governments.

In 2012, presidential candidate Mitt Romney said that 47 percent of the population would vote Democrat no matter what. He claimed it was because they receive some type of federal assistance.

Instead, the states that rely the most on federal benefits vote Republican. They often aren't aware of how dependent they are on tax credits, such as the interest deduction for home mortgage interest. They only consider visible federal benefits, such as welfare checks or food stamps. As a result, they don't think the government has done much for them personally.

The research shows that welfare and food stamp recipients don't vote much. They are so low-income that they are too busy to try and survive to go to the polls.