Evaluating Spending on U.S. Safety-Net Programs

The United States devotes substantial funds to interest payments, military expenses, and senior programs. This does not imply limited budget allocations for safety-net programs aimed at assisting the poor. In reality, spending on means-tested welfare programs has significantly increased.

Numerous politicians from both parties have avoided making tough trade-offs, opting instead to consent to almost all proposals. This has led the country toward impending fiscal challenges expected in the 2030s.

Despite a legal requirement since 2011, there is no comprehensive federal program inventory. A 2015 Government Accountability Office report identified over 80 federal programs designed to support low-income individuals.

The largest programs include Medicaid and the Children’s Health Insurance Program, covering over 73 million Americans with minimal enrollee costs. Federal Medicaid expenditure more than doubled from 2014 to 2025, costing around $1 trillion annually when combined with state spending.

Enrollment in the Supplemental Nutrition Assistance Program, commonly known as food stamps, traditionally varied with the economy: increasing during economic downturns and decreasing during growth periods. By 2025, even with a historically low unemployment rate and economic growth, over 12% of Americans received food stamps, a higher figure than from the program’s inception in 1969 until 2009.

Although cash benefits to the poor underwent substantial reform in the 1990s, the Temporary Assistance for Needy Families program persists. Social Security and tax regulations provide additional support. Pell Grants assist lower-income students attending college, while premium subsidies aid those not on Medicaid in purchasing health insurance through the Affordable Care Act. Various programs also offer housing support for lower-income individuals.

In fiscal 2025, the federal government allocated $1.256 trillion to principal programs aiding low-income individuals, surpassing defense spending by over $300 billion. This figure excludes Medicare or Social Security benefits for low-income seniors, programs exclusive to low-income members of specific groups such as veterans and Native Americans, or any state and local expenditures.

According to the Census Bureau’s official poverty count, anti-poverty spending averages at $35,000 annually per individual in poverty or $181,000 per impoverished family. Economist Milton Friedman argued that if this money reached impoverished individuals, they would be among the affluent. So where does the money go? A portion is lost to bureaucratic processes. A 2024 Manhattan Institute report estimated that approximately 20% of social welfare spending involves exchanging money back to taxpayers in the same year. Navigating the complex network of overlapping anti-poverty programs is challenging, leading to inefficiencies.

Another issue is scope expansion. Programs initially restricted to the truly poor and disabled have broadened their eligibility criteria over time. The Affordable Care Act expanded Medicaid to include able-bodied, working-age adults, potentially crowding out traditional Medicaid populations from accessing timely and high-quality care. Beyond Medicaid, approximately three-quarters of school lunches are now fully or partially subsidized.

Improper benefits claims, ranging from deliberate fraud to unclear program designs, allow Americans who do not qualify to receive aid. Planned criminal deception and lenient oversight contribute to this issue. The GAO estimates federal losses between $233 billion and $521 billion annually due to fraud.

In 2025, Medicare, Medicaid, the Earned Income Tax Credit, and SNAP witnessed the highest levels of improper payments. Despite annual GAO reports highlighting improper payments and recommending safeguards, these advisories are largely ignored. An estimated 87% of able-bodied adults without dependents on SNAP in 2023 did not meet work requirements.

During the Biden administration, lenient standards for ACA premium subsidies facilitated fraud, potentially involving 6 million improper enrollments. Legislative reforms under the One Big Beautiful Bill Act predict a reduction in SNAP enrollment. The bill’s Medicaid reforms, inaccurately labeled as ‘cuts,’ merely aim to realign spending with pre-2021 trends. Medicaid expenditure will continue growing annually under the bill while maintaining a higher level than the 2021 baseline forecast through at least 2036.

The U.S.’s unsatisfactory healthcare outcomes are not attributable to underfunding. In terms of public health spending as a GDP percentage, the U.S. surpasses most developed nations. In 2019, U.S. government healthcare expenditure matched that of Britain or France, and was significantly higher than Sweden, Norway, Australia, Spain, or Italy.

The national debt has exceeded $40 trillion partly due to substantial welfare and healthcare spending. The U.S. operates a highly progressive tax-and-transfer system redistributing vast amounts, yet it seems to have lost focus on its primary objective: alleviating poverty. There is sufficient funding to aid the impoverished and disabled without perpetually increasing health and welfare spending.