WASHINGTON, August 12, 2017 – To control the annual federal government budget deficit, government spending must be reduced. This appears to be very difficult. About half of government spending today goes toward income maintenance and welfare-type programs. Cutting those programs will be very difficult, especially at a time when Trump wants to rebuild the military.
Democrats will cry foul when President Trump reduces spending for welfare, food stamps, unemployment compensation and other safety net programs. Trump will counter those arguments by noting that with growth in the economy, those collecting government assistance will no longer need it, so spending will fall without causing any harm to anyone.
In addition, Trump says he can reduce spending without causing harm by simply eliminating improper payments and running the programs more efficiently.
Welfare abuse is costly
Being a businessperson, Trump understands that programs should be carried out efficiently and without any waste or fraud. A 2016 study based on reports from the Office of Management and Budget (OMB) and the General Accounting Office (GAO), estimated that improper welfare payments and fraud totaled $71.5 billion in 2015.
The $71.5 billion figure is more than the total spending on temporary assistance for needy families, food stamps, head start, child nutrition programs, job training, child care, heating assistance programs and supplemental nutrition programs combined.
President Trump believes that by running the government more efficiently, the $71.5 and perhaps more can be saved. He says that he can cut $3.6 trillion in government spending over the next decade. That comes to an average of $360 billion per year.
OMB looks at specific programs
OMB examined improper payments made to welfare recipients, investigating each program individually to determine just how much can be saved by eliminating fraud and abuse. Their final numbers are startling.
Of the abused programs listed, Medicaid was the costliest. OMB estimated that almost 10 percent of the nearly $400 billion annual Medicaid spending went to improper payments. While it is difficult to determine how many of these improper payments are due to fraud, as opposed to human error.
Under some new health care proposals now before Congress, spending on Medicaid will be reduced. President Trump believes he can reduce spending by returning authority over Medicaid to the states and by eliminating the improper payments.
The earned income tax credit and child tax credits are also rife with abuse and fraud. OMB estimates that almost 24 percent of these payments are improper. In fact, OMB refers to these negative income tax programs as “high error programs.”
OMB’s Inspector General estimates that this improper payment rate is likely higher than his agency’s current estimates, putting that figure into the 25-30 percent range.
Every one of the social safety net programs has some percentage of improper payments.
Trump says he will fix this
Programs such as those cited were originally intended to provide short term assistance for all able-bodied Americans temporarily in need. However, these programs are set up to discourage people from leaving them once they’ve become part of the system. As a result, families are often locked into these programs for generations.
One solution being offered and exhibiting some success is to require able-bodied recipients of these income maintenance programs to do some work in return for their free money from the American taxpayers. Trump believes a workfare program will solve many of the budget and spending problems.
In May 2017, President Trump said, “Get to work or lose your benefits.” The President’s Budget Director Mick Mulvaney noted, “If you are on food stamps and you are able bodied, we need you to go to work.”
According to Robert Rector, a senior research fellow at the Heritage Foundation, the White House needs to “go after the four million able-bodied adults without dependents in the food stamp program.”
Americans are compassionate
The American welfare programs currently in place today were originally put in place by the taxpayer-supported government as a compassionate way for those taxpayers to effectively share some of the income they earned to other less fortunate Americans in need. However, many of these same Americans who support such plans at least in theory, do have a problem with giving up a portion of their income to those clearly able to earn their own income. While most Americans would gladly continue some style of welfare program, they perfer that this money go to those in need.
Welfare abuse is costly. Aside from the more than $70 billion in annual cost for improper payments, the long-term effect of abuse could be far greater. Suppose hard-working Americans become so frustrated by the abuse of these programs that they want to stop them altogether. Then those most in need will truly get hurt.
Let’s stop the spiraling abuse of these programs before that happens.