Low-Income Assistance Programs: Trends in Federal Spending (CRS Report for Congress)
Premium Purchase PDF for $24.95 (21 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
| Release Date |
Revised May 7, 2014 |
| Report Number |
R41823 |
| Report Type |
Report |
| Authors |
Gene Falk, Specialist in Social Policy |
| Source Agency |
Congressional Research Service |
| Older Revisions |
-
Premium June 13, 2012 (19 pages, $24.95)
add
|
Summary:
This report examines the spending trends of 10 major need-tested benefit programs or groups of programs: (1) health care from Medicaid and the Children's Health Insurance Program (CHIP); (2) the refundable portion of the health insurance tax credit enacted in the 2010 health care reform law; (3) the Supplemental Nutrition Assistance Program (SNAP); (4) assisted housing; (5) financial assistance for post-secondary students (Pell Grants); (6) compensatory education grants to school districts; (7) the Earned Income Tax Credit (EITC); (8) the Additional Child Tax Credit (ACTC); (9) Supplemental Security Income (SSI); and (10) Family Support Payments. The common feature of need-tested programs is that they provide benefits, services, or funding based on a measure of limited financial resources (income and sometimes assets). However, other than that common feature, the programs differ considerably in their target populations, services, and focus.
In total and in inflation-adjusted terms, federal outlays for major need-tested programs increased in each decade examined in this report, from the 1960s to the present. There were particularly large increases in need-tested outlays during the FY2007 through FY2011 period, attributable to the effects of the recent deep recession (which increased the number of people eligible for aid) and policy responses to it that increased federal funding and benefits for certain programs. Spending for these programs declined from FY2011 to FY2012, as the effects of many of the temporary funding increases for these programs made in response to the recession expired. Total outlays for these programs began to rise again from FY2012 to FY2013. The Congressional Budget Office (CBO) forecasts that under current law, federal outlays for need-tested programs would increase, even in inflation-adjusted terms, in the upcoming decade. However, that increase is attributable to health care programs. For programs other than health care, total inflation-adjusted spending is projected to decrease over the period from FY2013 through FY2024.
Different programs also have different spending trends. Cash benefitsâto the aged, blind, and disabled and needy families with dependent childrenâcomprised most aid to low-income families in the early 1960s. However, over the period from the 1960s through the end of the 1980s, most of the growth in aid was for non-cash benefits in the form of education, food, housing, and medical assistance.
The 1990s was the decade of "welfare reform." The policies affecting low-income families with children, in particular, were substantially altered, with less emphasis on providing a "safety net" for families without a worker and more emphasis on aiding low-income workers in a system geared to "make work pay." Federal funding for cash assistance for needy families with children fell, but this was far more than offset by increases in the EITC, which supplements the earnings of lower-income families, as well as federal funding for other programs that support lower-earning families (e.g., child care subsidies).
Outlays for major low-income assistance programs continued to increase in the 2000s even before the onset of the recent recession. This increase stemmed from increased spending on the refundable EITC and child tax credits, SNAP, education programs, and Medicaid.
