The explosive growth of federal subsidies

K.E. Campbell

As best as can be determined, there are 18 different federally funded food and nutrition programs, 47 federally funded employment and training programs, over 20 federally funded housing assistance programs, and 80 federally funded programs for the "transportation disadvantaged."

The House Republican Study Committee counted 77 different federal means-tested welfare programs, but the actual number of programs is unknown, even to the General Accountability Office.  According to the RSC, since the beginning of the "war on poverty" in the mid 1960s "Americans have spent around $16 trillion" on federal programs for the poor yet "poverty is higher today than it was in the 1970s."

The federal government's Catalog of Federal Domestic Assistance (CFDA) enumerates 2,185 federal assistance programs available to "state and local governments; federally-recognized Indian tribal governments; territories (and possessions) of the United States; domestic public, quasi- public, and private profit and nonprofit organizations and institutions; specialized groups; and individuals."

Using the CFDA program count, the Cato Institute has tracked the proliferation of federal subsidy programs over time and reported in early 2010 that the number "soared 21 percent during the 1990s and 40 percent during the 2000s." In all, the number of federal subsidy programs has doubled since the mid-1980s.  Not only is federal spending on such aid soaring, but the "federal government is also increasing the scope of its activities, intervening in many areas that used to be left to state governments, businesses, charities, and individuals." The result, according to Cato:

"...state governments are becoming no more than regional subdivisions of the national government, businesses and nonprofit groups are becoming tools of the state, and individualism is giving way to a more European desire for cradle-to-grave dependency."

Regarding the problem of "runaway relief" economist Henry Hazlitt correctly predicted in 1969 in Man vs. The Welfare State that "the army of relief and other subsidy programs will continue to grow, and the solvency of the government will become increasingly untenable, as long as part of the population can vote to force the other part to support it."  Of course helping those who can't help themselves is crucial -- leaving aside the matter of private/voluntary versus state/coerced - but the federal government's role in this regard has gone from safety net to tangled web.  (We now subsidize the "rich and famous.")  In addition to waste, fraud, abuse, program bloat, and overlap/duplication, a fundamental challenge for even essential programs will always be, as Hazlitt wrote, how to "mitigate the penalties of misfortune and failure without undermining the incentives to effort and success."

For an admittedly anecdotal yet revealing and refreshingly non-politically-correct firsthand account along these lines, I recommend a recent article by a young cashier, titled "My Time at Walmart: Why We Need Serious Welfare Reform." (Hat tip: Mark Levin) 

As best as can be determined, there are 18 different federally funded food and nutrition programs, 47 federally funded employment and training programs, over 20 federally funded housing assistance programs, and 80 federally funded programs for the "transportation disadvantaged."

The House Republican Study Committee counted 77 different federal means-tested welfare programs, but the actual number of programs is unknown, even to the General Accountability Office.  According to the RSC, since the beginning of the "war on poverty" in the mid 1960s "Americans have spent around $16 trillion" on federal programs for the poor yet "poverty is higher today than it was in the 1970s."

The federal government's Catalog of Federal Domestic Assistance (CFDA) enumerates 2,185 federal assistance programs available to "state and local governments; federally-recognized Indian tribal governments; territories (and possessions) of the United States; domestic public, quasi- public, and private profit and nonprofit organizations and institutions; specialized groups; and individuals."

Using the CFDA program count, the Cato Institute has tracked the proliferation of federal subsidy programs over time and reported in early 2010 that the number "soared 21 percent during the 1990s and 40 percent during the 2000s." In all, the number of federal subsidy programs has doubled since the mid-1980s.  Not only is federal spending on such aid soaring, but the "federal government is also increasing the scope of its activities, intervening in many areas that used to be left to state governments, businesses, charities, and individuals." The result, according to Cato:

"...state governments are becoming no more than regional subdivisions of the national government, businesses and nonprofit groups are becoming tools of the state, and individualism is giving way to a more European desire for cradle-to-grave dependency."

Regarding the problem of "runaway relief" economist Henry Hazlitt correctly predicted in 1969 in Man vs. The Welfare State that "the army of relief and other subsidy programs will continue to grow, and the solvency of the government will become increasingly untenable, as long as part of the population can vote to force the other part to support it."  Of course helping those who can't help themselves is crucial -- leaving aside the matter of private/voluntary versus state/coerced - but the federal government's role in this regard has gone from safety net to tangled web.  (We now subsidize the "rich and famous.")  In addition to waste, fraud, abuse, program bloat, and overlap/duplication, a fundamental challenge for even essential programs will always be, as Hazlitt wrote, how to "mitigate the penalties of misfortune and failure without undermining the incentives to effort and success."

For an admittedly anecdotal yet revealing and refreshingly non-politically-correct firsthand account along these lines, I recommend a recent article by a young cashier, titled "My Time at Walmart: Why We Need Serious Welfare Reform." (Hat tip: Mark Levin)