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Trump’s Budget Keeps the Safety Net

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Trump’s Budget Keeps the Safety Net

March 26, 2017

President Trump’s “skinny budget”—which would shift $54 billion in non-defense discretionary spending over to defense—has been unfairly savaged for allegedly eviscerating the social safety net. Headlines such as “How Trump's Budget Cuts Could Hurt Low-Income Americans” (CNN) and “If You’re a Poor Person in America, Trump’s Budget is Not For You” (Washington Post), were accompanied by a New York Times editorial describing the budget as a sadistic attempt to “impose pain for pain’s sake.”

Such headlines may lead people to wonder just how deeply President Trump’s budget proposal would cut federal anti-poverty spending below current levels: Ten percent? Twenty percent? More?

The answer is: zero.

The federal government classifies its programs by functional codes. Anti-poverty programs primarily consist of functions 604 (housing aid), 605 (food aid), 609 (cash and related aid), and the portion of function 551 (health care) that includes Medicaid, CHIP, and ObamaCare. This limited definition surely undercounts anti-poverty spending by excluding education, job training, and community development programs that target low-income families, as well as hundreds of billions of dollars spent by state and local governments to alleviate poverty.

Yet even under this strict definition, Washington will spend $783 billion on anti-poverty programs this year, and is scheduled to spend $804 billion next year. In the (highly unlikely) event that every cut proposed by President Trump is enacted, it would merely reduce next year’s spending level to approximately $798 billion. So instead of expanding 2.7 percent next year, the anti-poverty budget would expand by 1.9 percent. Only in Washington could 1.9 percent growth be portrayed as slashing the safety net.

Federal anti-poverty spending has rapidly escalated for fifty years, regardless of the party controlling Washington. Its share of the federal budget has expanded from 6 percent under President Nixon, to 9 percent under Presidents Carter and Reagan, 10 percent under President George H.W. Bush, 14 percent under President Clinton, and 16 percent under President George W. Bush.

Under President Obama, the recession, subsequent “stimulus” law, and enactment of ObamaCare pushed anti-poverty spending up to 19 percent of the federal budget – a level that President Trump’s proposal would trim by just 0.2 percentage points. This level would still exceed that of any modern President, including most of President Obama’s tenure.

In the context of such rapid growth—from $416 billion a decade ago, to $783 billion this year, to a projected $1,146 billion a decade from now—eliminating $6 billion is less than one percent of today’s budget.

A typical example of spending growth is the SNAP program (formerly food stamps). Since 2000, Congress has expanded program eligibility to the point that a 37 percent increase in the number of poor Americans was followed by a 148 percent increase in the number of SNAP recipients. Accordingly, federal SNAP spending has soared from $18 billion in 2000, to $35 billion in 2007 before the recession, to $77 billion today. Of course, any proposal to pare back even a small fraction of this expansion is portrayed – literally – as a scheme to “starve” Americans to death.

This apocalyptic rhetoric is nothing new. When the House of Representatives passed a 2005 budget reconciliation bill that merely trimmed the average annual growth rate of entitlement spending from 5.75 percent to 5.61 percent, a New York Times editorial attacked the bill and its architects with terms like “abominable,” “outrageous,” “madness,” “mean-spirited” “ideological,” “mayhem” “slashing” and – pot, meet kettle – “over-the-top.”

Just imagine the reaction had Congress reduced the spending growth rate all the way down to 5.5 percent.

Cutting any federal program looks worse when viewed in isolation because it feeds the assumption that its beneficiaries will be left helpless. In reality, Washington runs hundreds of overlapping anti-poverty programs, including 160 housing programs, 21 programs for the homeless, and 18 food aid programs (state and local governments also add their own programs). Eliminating or consolidating one program leaves its caseload eligible for other programs, many of which have statutory flexibility to redirect funds to new populations should the need arise.

For example, the largest anti-poverty program termination proposed by the President – the $3 billion Low-Income Home Energy Assistance Program (LIHEAP) can be partially replaced by states using the highly-flexible $16 billion TANF grant program, which is not always fully spent by the recipient states anyway.

Another example of broad-based funding alternatives is the private Meals on Wheels program for low-income seniors. Its local groups are primarily funded by a combination of private organizations, state and local governments, and federal funding from the Older Americans Act (which is not targeted for cuts). Yet because some local programs may receive a small amount of funding from the federal Community Development Block Grant (CDBG) program, the President’s proposal to terminate the wasteful CDBG was attacked by reporters and activists as essentially terminating Meals on Wheels. Yet any CDBG reforms would have minimal impact on Meals on Wheels, and Congress could choose to retain the very small portion of CDBG funding for this organization.

The vast majority of anti-poverty spending comes from entitlement programs that were not even addressed in the President’s budget proposal. Critics accusing the President of trying to gut the safety net are misrepresenting his proposal, and stirring up unnecessary panic and fear for families.

Brian Riedl is a senior fellow at the Manhattan Institute. Follow him on twitter @Brian_Riedl.

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