Overlooked Spending Cut Targets

The budget conversation for quite a while now has tended to bore in on Social Security and Medicare for the very sensible Willie Sutton Principle (“because that’s where the money is”), but there are some other large pots of dubious spending that ought to get some primary attention.

The four largest federally funded poverty programs—Medicaid, food stamps, housing subsidies, and supplemental income programs like the Earned Income Tax Credit—cost $650 billion last year, compared to $451 billion for Medicare.  The real problem is not the high spending amounts per se, but the way they have expanded willy-nilly beyond the ranks of the truly poor, which has run up their price tags beyond where they ought to be.  Some states offer benefits up to 200 percent of the poverty line, and Obamacare includes subsidies for people up to 400 percent of the poverty line—people ordinarily called “middle class.”

Think of it this way: there are about 43 million Americans below the poverty line.  Setting a benefit threshold at 150 percent of the poverty line adds another 35 million people to the program rolls.

Never mind for now that some of these programs are counterproductive, or don’t work.  Time magazine’s Joe Klein stirred up a fuss with a column last week arguing that the near-sacred Head Start program doesn’t work, and concluding that “there is no creative destruction when it comes to government programs.”  And whose fault is that?  Conservative analysts have been pointing to the data on Head Start’s shortcomings for years, but have been ignored.  But since Klein said it in a house organ of the establishment, the left-liberal hive mobilized to denounce his article.

 

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