Examining the Growth of the Welfare State, Part I

House Subcommittee on Health Care and Financial Services

2025-02-11

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Summary

This meeting focused on examining the growth and impact of the welfare state on American families. Speakers debated the effectiveness, incentives, and perceived inefficiencies of various federal assistance programs, particularly concerning their influence on family structure and economic well-being.

Themes

Impact of Welfare Programs on Family Structure

Some speakers asserted that federal welfare policies, especially those expanded during the "War on Poverty," actively penalize marriage and contribute to the rise of single-parent households.[ 00:03:36 ] Mr. Grothman highlighted that in 1960, around 5% of children were born to unmarried women, a figure that has risen to approximately 40% today.[ 00:03:36 ] Mr. Rector explained that nearly all 90 means-tested welfare programs impose "outrageous marginal tax rates on marriage," making it economically irrational for low-income couples to marry. For example, a couple could lose tens of thousands of dollars in benefits upon marrying. This policy design, speakers argued, undermines the traditional family structure and leads to negative outcomes for children, such as heightened risks for substance abuse, crime, and poor educational results.[ 00:04:37 ]

Effectiveness and Necessity of Safety Net Programs

Conversely, other participants emphasized the critical role of safety net programs in preventing poverty and enabling upward mobility for struggling families. Mr. Krishnamoorthi shared his personal experience, stating that his family relied on programs like SNAP's predecessor during a financial hardship, which allowed them to "survive and flourish." He argued that these programs do not encourage laziness but "empower Americans to succeed on their own" and are good economic policy, citing a USDA finding that every dollar in SNAP benefits leads to a $1.54 increase in GDP. Mr. Linden presented numerous studies indicating that investments in health, nutrition, and housing programs yield significant long-term benefits, including better health, educational outcomes, and higher earnings for children. Ms. Randall shared a personal story about how Medicaid enabled her sister with a complex disability to "survive and thrive" and how financial aid and SNAP helped her family during her parents' divorce.[ 01:22:08 ]

Waste, Fraud, and Abuse in Welfare Programs

Concerns were raised about significant waste, fraud, and improper payments within welfare programs.[ 00:05:39 ] Mr. Grothman mentioned that over $100 billion in improper payments were made last year in programs like Medicaid, food stamps, and the income tax credit.[ 00:05:48 ] Ms. Onwuka noted that duplicative programs across various agencies, along with relaxed eligibility requirements and waivers, create loopholes leading to waste and fraud.[ 00:54:49 ]

[ 00:56:14 ] She pointed out that able-bodied adults often receive benefits without working, partly due to states waiving work requirements.[ 00:57:16 ] Mr. Rector claimed that a 37% fraud rate exists in the Earned Income Tax Credit (EITC) and suggested that similar rates would be found in other programs if properly audited. Conversely, Mr. Bell emphasized the importance of Inspector Generals (IGs) in rooting out waste and fraud, highlighting that for every $1 invested in an IG office, $26 is saved.

Corporate Welfare vs. Individual Welfare

A contrasting perspective was introduced by Mr. Krishnamoorthi and Mr. Linden, who argued that "corporate welfare" and tax cuts for the wealthy represent a far greater and more problematic form of government dependency. Mr. Krishnamoorthi cited a Cato Institute finding of over $100 billion annually in corporate welfare and Brookings Institution data showing $20 billion in direct federal subsidies to oil and gas companies. Mr. Linden asserted that it is "indefensible to scapegoat hardworking Americans" while trillions in tax breaks benefit the ultra-wealthy and giant corporations. He criticized proposals to cut social safety net programs to fund further tax cuts for billionaires and corporations.

Impact of Immigration on Welfare Programs

Mr. Gill raised concerns about the cost of providing welfare benefits to undocumented immigrants and their families.[ 01:40:27 ]

He claimed that illegal aliens and their families can receive welfare from over a dozen programs, costing billions annually for education, healthcare, and various assistance programs. He suggested that these benefits incentivize mass migration and are unsustainable given the national debt. Mr. Linden countered that the focus should be on the larger sums allocated to corporate subsidies and tax cuts for the wealthy.[ 01:40:33 ]

Tone of the Meeting

The meeting had a contentious and highly polarized tone, marked by sharp disagreements between the Republican and Democratic members.[ 00:09:03 ]

[ 00:09:18 ] While speakers generally agreed on the importance of family and reducing poverty, their approaches and priorities differed significantly. Personal anecdotes were used effectively to underscore emotional appeals and differing philosophies on welfare.[ 01:22:08 ] Exchanges often escalated into accusatory rhetoric, with Republicans focusing on moral incentives, family structure, and costs associated with perceived abuse, and Democrats emphasizing human dignity, economic empowerment through social safety nets, and corporate accountability.[ 01:10:35 ] [ 01:40:33 ] [ 01:52:21 ]