How Much Does the Nation Spend on Welfare? - Public Aid
percent total programs billion
Public assistance has usually included such programs as Aid to Families with Dependent Children/Temporary Assistance for Needy Families (AFDC/TANF), General Assistance, and Medicaid. In 2000 public assistance accounted for 43 percent of all public aid spending—a 48 percent increase since 1980. According to the U.S. Census
|Total spending||Constant (2000) dollars|
|Level of government and year||Current dollars||Constant (2000) dollars||Medical benefits||Cash aid||Food benefits||Housing benefits||Education benefits||Jobs/training||Services||Energy aid|
|State and local|
|–Represents or rounds to zero. NA Not available.|
|SOURCE: "No. 515. Government Expenditures for Income-Tested Benefits by Type of Benefit: 1980–2000," in "Social Insurance and Human Services," Statistical Abstract of the United States: 2002, U.S. Census Bureau, Washington, DC, 2002 [Online] http://www.census.gov/prod/2003pubs/02statab/socinsur.pdf [accessed January 7, 2004]|
Bureau, by 2000 the cost of medical benefits had risen 69 percent since 1980, while the cost of cash aid programs increased by a third. In 1980 medical and cash aid programs accounted for 58 percent of public aid spending; in 2000 these programs absorbed 72 percent of public aid budgets. Table 1.1 breaks down all social welfare spending by specific categories and by state and federal spending.
The portion of the GDP spent on social welfare increased only moderately between 1975 and 2000. In 2000 public aid accounted for about 4 percent of the nation's GDP, an increase of approximately one percentage point from expenditures in the late 1970s and 1980s and one-half point since 1995. However, public health and medical costs nearly doubled in the twenty years from 1975 to 1995, from 3.2 percent of the GDP in 1975 to 6.1 percent of the GDP by the mid-1990s. (See Table 1.2.) This increase reflects, among many factors, the growing number of older Americans, who have greater need of medical services, as well as the increasing cost of medical care in general.
A rapid increase occurred in public spending on health and medical care between 1990 and 2000. (See Table 1.3.) In 1990 the government spent $282.5 billion on health care. Ten years later, government spending on health and medical care had more than doubled, to nearly $587.2 billion. Medicare and public assistance payments (primarily Medicaid) accounted for almost three-quarters of that sum. In 1990 the government paid about $110.2
|Total expenditures||Federal||State and local government|
|Percent of—||Percent of—||Percent of—|
|Year||Total (bil. dol.)||Percent change1||Total GDP2||Total govt. outlays||Total (bil. dol.)||Percent change1||Total GDP2||Total federal outlays||Total (bil. dol.)||Percent change1||Total GDP2||Total state outlays|
|1Percent change from immediate prior year.|
|2Gross domestic product.|
|SOURCE: "Social Welfare Expenditures Under Public Programs as Percent of GDP and Total Government Outlays: 1980 to 1995," in Statistical Abstract of the United States, 2000, U.S. Census Bureau, Washington, DC, 2000|
billion for Medicare; in 2000 it spent $224.4 billion. Similarly, spending on public assistance medical payments (Medicaid) in 1990 reached $78.7 billion, but by 2000 Medicaid accounted for over $208.5 billion. These are huge changes involving enormous sums of money over a relatively short time. This situation helps to explain some of the problems governments face in trying to control their budgets and why health care has become a major national issue.
According to the U.S. Bureau of the Census, in 2000 the two major categories of public cash benefit payments paid out about $50 billion. Family assistance payments (primarily AFDC/TANF, not including Medicaid) totaled $18.3 billion, while $31.7 billion was paid out for SSI. Spending for SSI increased by 90 percent between 1990 and 2000. Much of this growth reflects the increase in the number of retired Americans, many of whom need Supplemental Security Income in order to live. By contrast, expenditures for family assistance declined by 4.7 percent during the same period. (See Table 1.4.)
Table 1.5 uses fiscal year 2000 dollars to compare how federal funds have been divided among various types of income-tested benefits from 1968 through 2000. (See Table 1.5.)