Can the president's health care law cut welfare spending?
In a Jan. 3 speech in the House, Majority Leader Eric Cantor, R-Va., argued in support of a bill requiring the annual budget resolution to detail past and projected growth of entitlement programs and propose reforms to them.
“Under the current administration, we have seen an explosion in the spending for welfare programs,” Cantor said. The rule will “allow us to begin to responsibly control the growth of these welfare programs and ensure they can help those who need them most."
But according to researchers at the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington, D.C., Cantor's claims avoid two important facts: welfare spending is not the cause of the nation's long-term budget problems and federal spending on low-income entitlement programs other than health care is actually expected to shrink in 2013.
The portion of federal spending dedicated to welfare programs depends on how "welfare" is defined. The three biggest components of federal spending are defense, Social Security and health care — with other welfare spending not far behind at number four. If you take traditional welfare spending on its own, it is only about 15 percent of the budget; but when combined with Social Security, Medicaid and Medicare, the total grows to 60 percent of the budget.
In her analysis of the issue, Sharon Parrott of the Center on Budget and Policy Priorities argued, "The (bill) may obscure more than it illuminates: (The Congressional Budget Office) projects that low-income entitlements including health care will grow both in inflation-adjusted dollars and as a share of the economy in coming years; but if you remove health care costs, the picture is entirely different, with low-income entitlements outside health care falling over the next decade as a share of the economy and in inflation-adjusted terms."
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