Anti-Poverty Spending Grows

Published February 1, 2006

Congress adjourned until January 31 without taking final action on federal budget and tax bills, but that did not stop Republicans and Democrats from both praising and vilifying separate spending and tax bills passed by the House and Senate shortly before adjournment.

Republicans claimed Congress is again serious about controlling spending, while Democrats asserted tax cuts and “cuts” in spending would hurt the poor and benefit the rich.

Brian Riedl, senior policy analyst in federal budgetary affairs at The Heritage Foundation, scoffed at both claims.

“Anti-poverty spending has grown 42 percent in the last four years and will continue to grow in future years,” Riedl said. “We’ll go from growth of 39 percent over the next five years to growth of 38 percent in these programs. That’s it. If that’s slashing spending, we’ve gotten addicted to massive spending increases.”

Redistribution Largest Ever

Riedl also called for facts to overcome emotion in the claim the rich are shortchanging the poor. He said in 2004 “the rich paid the highest proportion of taxes in American history, and the poor received the highest proportion of federal spending in history. Sixty-four percent of all taxes came from 20 percent of taxpayers, the highest percentage ever. And for the first time in history, 16 percent of the federal budget went to anti-poverty programs.

“There is a perception that spending for the poor is being cut. That perception is not based in any of the facts,” Riedl said. “These anti-poverty programs grow 6 to 8 percent annually, without any votes, and nobody hears about it. The only time we hear about these programs is when Congress is voting to trim the growth rate.”

In Congress, trimming the rate of growth is called a spending cut. Pending “cuts” of this sort would amount to about $40 billion over five years in a wide variety of programs, including $8 billion from Medicaid and $5 billion from Medicare. These would be the first entitlement cuts in a decade.

Bush: ‘Victory for Taxpayers’

The proposed cuts in future spending are inconsequential in a nearly $2.6 trillion budget, Riedl said, but that did not stop President George W. Bush from declaring on December 21, “The Senate vote to reduce entitlement spending is a victory for taxpayers, fiscal restraint, and responsible budgeting.”

Two days earlier, as the House was preparing to vote on its spending provisions, Democratic Leader Nancy Pelosi of California told her colleagues, “As the Bible teaches us, to minister to the needs of God’s creation is an act of worship, to ignore those needs is to dishonor the God who made us. Let us vote no on this budget as an act of worship and for America’s children.”

The religious tone of Pelosi’s comments may have been inspired by church leaders who attacked the budget bills at rallies in Washington, DC and other major cities, and in letters to the editor in major newspapers across the country.

“The budget reconciliation process currently pending in Congress requiring large spending and tax cuts reveals a moral poverty in our nation even as it stands to worsen the economic plight of many,” wrote Rev. Mark S. Hanson, presiding bishop of the Evangelical Lutheran Church in America, and Rev. Dr. Clifton Kirkpatrick of the General Assembly of the Presbyterian Church USA, in a letter published in newspapers including the Chicago Sun-Times on December 15.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.