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The Welfare-Warfare State: Welfare

By Tyler Bauer

One of the things governments are best at is spending money. They usually don’t spend it wisely, but they are very good at spending it. In the United States, we have what is called a “welfare-warfare state” at the federal level. In our welfare-warfare state, the majority of the federal government’s budget goes towards these two areas. So, let’s take a look at what the government spends on welfare programs.

Fiscal Year 2016 (Budget of $3.90 Trillion)

Social Security

Social Security provided benefits to 41 million retired workers, 3 million spouses and children of retired workers, 6 million surviving children and spouses of deceased workers, and 10.6 million disabled workers and their eligible dependents in FY2016. In total, these benefits amounted to $916 billion, or 24% of the government’s total budget.

Health Insurance – Medicare, Medicaid, CHIP, and Obamacare Subsidies

Health insurance amounted to $1 trillion or 26% of the federal budget in FY2016.  Of this $1 trillion, $594 billion went to Medicare, which provided coverage for approximately 57 million people. To be eligible for Medicare, recipients must be either age 65 or older or have disabilities. The remaining $400+ billion went towards Medicaid, CHIP, and Obamacare subsidies. It is worth noting that Medicaid and CHIP are also partially funded by state governments.

Other Safety Net Programs – Tax Credits, Supplemental Security Income, Food Stamps, Housing Assistance, Childcare Assistance, and Help Meeting Home Energy Bills

Other safety net programs – such as those listed in the bolded title above – amounted to $366 billion or 9% of the FY2016 budget.

Benefits for Federal Retirees and Veterans

Benefits for federal retirees and veterans accounted for approximately $312 billion, or 8% of the FY2016 budget. According to the Center on Budget and Policy Priorities (CBPP), this category includes veterans’ benefits and services funding and federal employee retirement and disability funding.

Fiscal Year 2019 (Budget of $4.407 Trillion): Looking Towards the Future

Social Security

In the FY2019 budget, Social Security has been allocated $1.047 trillion, which amounts to roughly 24% of the federal budget.

Health Insurance – Medicare, Medicaid, CHIP, and Obamacare Subsidies

Spending on Medicare, Medicaid, and Obamacare marketplace subsidies total $1.108 trillion in FY2019. This translates to about 25% of the federal budget.

Other Mandatory Spending and Non-Defense Discretionary Spending

I didn’t have time to spend an entire day reading through the White House’s 160 page budget, so I wasn’t able to find the specific breakdown of spending on various subcategories. If you want to read the full budget, click on the hyperlink above. Anyway, other mandatory spending and non-defense discretionary spending – which would include the subcategories mentioned earlier under “Other Safety Net Programs” – amounts to $576 billion (13% of the federal budget) and $656 billion (15% of the federal budget), respectively.

What This Means

I included FY2016 and FY2019 for two reasons. First, FY2016 is far enough in the past to allow for better reflection on its budget, and FY2019 is the newest – and therefore the most relevant – budget. Second, I allowed a time lapse of three fiscal years to allow an opportunity to compare and contrast the two budgets. If you focus only on the percentages of the budget that each area of spending makes up, these two budgets seem virtually the same. However, if you focus on the gross amount of money spent on each area, you will see that each area of spending has grown since FY2016. For example, Social Security and health insurance spending increased by approximately 14% and 11%, respectively, over this time period. Seeing as spending seems to increase every year, the national debt is unlikely to be curbed anytime soon.

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