June 29, 1995 | Commentary on Welfare and Welfare Spending

ED062995b: Welfare: It Keeps Growing and Growing and ...

As Congress and the White House get down to the serious business of reforming America's welfare system, it might be useful to figure out how we got in the mess we're in. After all, when President Lyndon Johnson launched the War on Poverty back in 1965, he didn't envision an open-ended expansion of the welfare state.

Johnson's vision of a "temporary" investment to help the poor become self-sufficient and climb into the economic mainstream has turned into a bureaucratic and fiscal nightmare whose total cost has been calculated at $5.4 trillion.

Just how did this burgeoning welfare state develop?

America's descent into the welfare abyss is a relatively recent development. For the first 150 years of its existence, the U.S. government played a very minor role in welfare. "Charity" was conducted mainly by private religious organizations. In 1929, for example, total federal, state and local welfare costs were just $90 million, or about $800 million in today's dollars.

Welfare work relief programs -- the Civilian Conservation Corps, the Public Works Administration and others -- created to deal with the harsh effects of the Great Depression, fueled an increase in welfare spending to $46.6 billion in 1939. However, by the start of World War II, most of the these Great Depression anti-poverty programs had been terminated and welfare spending remained low during the post-war years.

During the 1950s and early 1960s, welfare spending grew slowly. But starting in 1965 -- a year after President Johnson declared War on Poverty -- new programs began an unprecedented proliferation based on the concept of "entitlement"; older ones expanded eligibility requirements. In just three years -- from 1965 to 1968 -- yearly welfare spending more than doubled, from $38.3 billion to $80.5 billion in today's dollars.

Between 1965 and 1975, yearly spending on cash aid welfare programs nearly tripled; social-service spending did triple; medical aid almost quintupled; food aid did quintuple; housing programs increased sevenfold; and job-training funds increased fifteenfold! By 1975, total yearly welfare spending had reached $119.4 billion, nearly five times as much as a decade earlier. (All these figures are adjusted for inflation.) By 1993, combined federal and state welfare spending on poor and low-income persons had risen to $324 billion per year.

One way to get a grip on how quickly welfare has expanded is to compare welfare spending with spending on other programs and functions of government:

  • In 1965, the United States spent just 17 cents on welfare for each dollar spent on national defense. By 1993, spending on welfare had surpassed defense, rising to $1.11 for each defense dollar. By the year 2000, America will be spending twice as much on welfare as defense.
  • In 1965, we spent 29 cents on welfare for every dollar spent by all levels of government on primary, secondary and post-secondary education. By 1993, welfare costs were 91 cents per education dollar.
  • In 1965 the United States spent 51 cents on welfare for each dollar spent on Social Security and Medicare. By 1993, the figure was 77 cents in welfare costs for each Social Security and Medicare dollar.
  • At the beginning of the War on Poverty, welfare spending absorbed about 1 percent of the gross domestic product (GDP). By 1993, welfare spending was taking up more than 5 percent of GDP.

And if current projections are to be believed, the situation is only going to get worse. According to Congressional Budget Office projections:

  • Annual federal welfare spending will rise from $272.1 billion in 1995 to $387.3 billion in the year 2000.
  • Combined federal and state welfare spending will rise from $378.7 billion in 1995 to $551.7 billion in the year 2000.
  • Between 1996 and 2000, the federal government will spend $1.6 trillion on welfare.
  • Add the cost of welfare to the states and that number increases to $2.38 trillion.

This kind of growth simply can't be sustained. That realization -- on Capitol Hill and in the White House -- is one of the reasons serious reform finally is being discussed. What remains to be seen is whether lawmakers are ready to take the political heat for the total overhaul needed to bring welfare spending under control.

About the Author

Robert Rector
DeVos Center for Religion and Civil Society

This essay by Robert E. Rector, senior policy analyst for family and welfare issues at The Heritage Foundation, Washington, D.C., is adapted from his upcoming monograph,