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Analysis: Programs For Low-Income Families Not Straining Federal Budget

A new analysis suggests federal programs for low-income families are not straining the federal budget. (CBPP)
A new analysis suggests federal programs for low-income families are not straining the federal budget. (CBPP)
February 29, 2016

CHARLESTON, W. Va. - Some West Virginia lawmakers want to restrict access to low-income assistance, arguing the programs are unsustainably expensive. A new analysis suggests they're not.

Isaac Shapiro, senior fellow at the Center on Budget and Policy Priorities, says the cost of all federal aid to low-income families has been steady over the long term.

He says in fact they cost less than the trillion dollars a year the federal government gives away in tax cuts for the upper income.

"Not all of that goes to the rich, but a large and disproportionate share does," says Shapiro. "If you combine all low-income programs, they amount to less than these tax loopholes and tax expenditures cost."

Separate bills at the Legislature would expand work requirements for the Supplemental Nutrition Assistance Program (SNAP), formerly food stamps, and add drug testing to Temporary Assistance To Needy Families (TANF).

The largest federal income support program is the Earned Income Tax Credit (EITC), which is targeted at the working poor.

SNAP is the next largest. TANF and the other programs are smaller.

Shapiro says all of the low-income programs together cost the equivalent of two percent of the GDP - much less than many assume.

He says although the percentage has fluctuated some, it's been at or close to that average since the 1970s.

"It amounts to about two cents on the dollar," says Shapiro. "That share increased during the recession. That has since declined and pretty soon will be lower than its historic average."

The other big-ticket item is Medicaid, the health-care program for the poor.

In spite of fears it would grow to be out of control with expansion under the Affordable Care Act, Edwin Park vice president for health policy at the CBPP, says its financial structure has proved remarkably stable really since it was established.

"Congress actually increased how much the federal government will pay for Medicaid to deal with the last two recessions," says Park. "The only time there's been a decrease was a temporary reduction during the Reagan administration."

Since the end of the recession, the overall federal deficit has fallen by nearly three quarters.

Dan Heyman, Public News Service - WV