Every Candidate's Trillion-Dollar Problem

The U.S. presidential candidates have trafficked more in epithets than in issues lately, but sooner or later, they will have to grapple with a problem that costs a trillion dollars a year and consumes 20% of our national budget: the welfare system.

Although welfare has been criticized for many failings over the years, economics professor Walter Williams sees the bottom line as unequivocal: "[w]elfare has done what even slavery couldn't do – that is, to destroy the black family."

And it is not only the black family that welfare has destroyed.  After examining the white underclass in Britain, Professor Williams concluded that "the welfare state is an equal opportunity destroyer."

In fact, whites make up a substantial majority of welfare recipients in the U.S., despite somewhat higher participation rates by some minority groups.

Williams's conclusion is shared by other observers who maintain that no matter how well intentioned its original purpose, welfare programs have metastasized into an unwieldy and unfair system that ends up harming the very people it is meant to help.

Whatever their views on income inequality, excessive entitlements, and the like, presidential candidates – along with the rest of us – clearly need to get a handle on how and why this happened so the problems can be fixed.

One reason it happened is that our welfare system traps many of its recipients into a cycle of poverty and dependence.  Just look at what it penalizes.  Its rigid requirements actually punish people for trying to work their way out of poverty because earning certain amounts of money means risking the loss of all welfare payments, which in turn means ending up with even less to live on – or, using the popular metaphor, it means falling off the welfare cliff.

Then look at what the system rewards.  Virtually all welfare programs pay substantially more to recipients who have children.  When she was single, Joleen from Chicago told us, "I just got food stamps."  Once she had a child, she got Medicaid, WIC, Section 8 housing, and TANF (Temporary Assistance for Needy Families), and after having a second child, Joleen reports, "with two kids, we're all covered."

The food stamp program, currently called SNAP (Supplemental Nutrition Assistance Program), also rewards childbearing.  It allows $200 per month for a childless single person, but payment jumps from $200 to $526 per month for a mother with two children, with the amount varying by state.

Medicaid – even under the Affordable Care Act – strongly favors those with children, too.  In 15 of the 23 states where Medicaid is not being expanded under the ACA, childless people do not normally qualify for welfare benefits, but a baby is an entry ticket into the system.

The Temporary Assistance for Needy Families program is flat-out not available to people without children.  And even the most effective of our welfare programs - the Earned Income Tax Credit (EITC) - requires having children to get significant benefits.

While it encourages women to have children, our welfare system strongly discourages marriage.  Sam, a single mother of two who works at a fabrication plant in Renton, Washington, explained: "When I first got pregnant I thought my boyfriend and I would get married.  But whenever we looked at the numbers, it just didn't make sense for us to marry[.] ... [T]he whole system seems tilted towards single parents."

Holly, who is married and lives in Oregon, made a similar point.  She and her husband have even thought about getting divorced to increase the welfare benefits they depend on, she told us, "but that would be hard to explain to our family and friends."  She then added, "I admit, I have friends who chose not to marry because they knew they'd lose money in the process."

The link between single parenthood and poverty has long been proven, and of course children suffer the worst consequences.  Children born to single mothers are five times more likely to drop out of school and twice as likely to end up in jail, compared with children from two-parent families.  And if there is no one in the household with a job, the children are deprived of an important role model.

Candidates, take note: today's counter-productive welfare system has 60 million recipients and costs more than the entire defense budget.  A system that provides powerful penalties for working plus powerful incentives to have children along with powerful incentives not to get married seems more than ripe for overhaul.

Phil Harvey and Lisa Conyers are the authors of The Human Cost of Welfare: How the System Hurts the People It's Supposed to Help.

The U.S. presidential candidates have trafficked more in epithets than in issues lately, but sooner or later, they will have to grapple with a problem that costs a trillion dollars a year and consumes 20% of our national budget: the welfare system.

Although welfare has been criticized for many failings over the years, economics professor Walter Williams sees the bottom line as unequivocal: "[w]elfare has done what even slavery couldn't do – that is, to destroy the black family."

And it is not only the black family that welfare has destroyed.  After examining the white underclass in Britain, Professor Williams concluded that "the welfare state is an equal opportunity destroyer."

In fact, whites make up a substantial majority of welfare recipients in the U.S., despite somewhat higher participation rates by some minority groups.

Williams's conclusion is shared by other observers who maintain that no matter how well intentioned its original purpose, welfare programs have metastasized into an unwieldy and unfair system that ends up harming the very people it is meant to help.

Whatever their views on income inequality, excessive entitlements, and the like, presidential candidates – along with the rest of us – clearly need to get a handle on how and why this happened so the problems can be fixed.

One reason it happened is that our welfare system traps many of its recipients into a cycle of poverty and dependence.  Just look at what it penalizes.  Its rigid requirements actually punish people for trying to work their way out of poverty because earning certain amounts of money means risking the loss of all welfare payments, which in turn means ending up with even less to live on – or, using the popular metaphor, it means falling off the welfare cliff.

Then look at what the system rewards.  Virtually all welfare programs pay substantially more to recipients who have children.  When she was single, Joleen from Chicago told us, "I just got food stamps."  Once she had a child, she got Medicaid, WIC, Section 8 housing, and TANF (Temporary Assistance for Needy Families), and after having a second child, Joleen reports, "with two kids, we're all covered."

The food stamp program, currently called SNAP (Supplemental Nutrition Assistance Program), also rewards childbearing.  It allows $200 per month for a childless single person, but payment jumps from $200 to $526 per month for a mother with two children, with the amount varying by state.

Medicaid – even under the Affordable Care Act – strongly favors those with children, too.  In 15 of the 23 states where Medicaid is not being expanded under the ACA, childless people do not normally qualify for welfare benefits, but a baby is an entry ticket into the system.

The Temporary Assistance for Needy Families program is flat-out not available to people without children.  And even the most effective of our welfare programs - the Earned Income Tax Credit (EITC) - requires having children to get significant benefits.

While it encourages women to have children, our welfare system strongly discourages marriage.  Sam, a single mother of two who works at a fabrication plant in Renton, Washington, explained: "When I first got pregnant I thought my boyfriend and I would get married.  But whenever we looked at the numbers, it just didn't make sense for us to marry[.] ... [T]he whole system seems tilted towards single parents."

Holly, who is married and lives in Oregon, made a similar point.  She and her husband have even thought about getting divorced to increase the welfare benefits they depend on, she told us, "but that would be hard to explain to our family and friends."  She then added, "I admit, I have friends who chose not to marry because they knew they'd lose money in the process."

The link between single parenthood and poverty has long been proven, and of course children suffer the worst consequences.  Children born to single mothers are five times more likely to drop out of school and twice as likely to end up in jail, compared with children from two-parent families.  And if there is no one in the household with a job, the children are deprived of an important role model.

Candidates, take note: today's counter-productive welfare system has 60 million recipients and costs more than the entire defense budget.  A system that provides powerful penalties for working plus powerful incentives to have children along with powerful incentives not to get married seems more than ripe for overhaul.

Phil Harvey and Lisa Conyers are the authors of The Human Cost of Welfare: How the System Hurts the People It's Supposed to Help.