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The Liberal Welfare State

The 1996 welfare reform bill changed the way government treated welfare. But last week the Left reverted back to the liberal welfare state in the stimulus bill. Hidden in the bill was a massive increase in welfare spending. While the 1996 reforms gave states more money if they moved people OFF welfare, the new policy gives states more money if more people stay ON welfare.

Here are the facts on the new welfare policies in this bill:

Total welfare spending in the bill for programs providing cash, food, housing, and medical care to the poor is over $260 billion or roughly one third the cost of the bill. This represents about $6,700 in new welfare spending for every poor person in the United States.

But that is just the cost for the first two years. The “stimulus” bill hides the real cost behind a budgetary gimmick that pretends all the new welfare spending will end in two years, even though clearly much of the new welfare spending is intended and designed to be permanent.

The added cost is another half trillion dollars. The overall 10 year cost of the “stimulus” bill in welfare spending alone will be nearly $800 billion. This new spending amounts to around $22,000 for every poor person in the U.S

This bill has so much welfare money in it, its no wonder they had to give an incentive to states to keep people on welfarethats the only way they could spend all the money!

The bill contains expansions to food stamps, the earned income tax credit, the refundable child credit, Medicaid eligibility standards, Pell grants, and Title I education grants. But probably most disconcerting is President Obama’s “Make Work Pay” refundable tax credit, which will provide up to $500 in cash to low income adults who pay no income taxes, including able-bodied adults without dependent children. This policy is designed solely to redistribute wealth from taxpayers (middle and upper class individuals) to low-income individuals.

It seems some bad ideas never die, and the welfare state is certainly one of them. Before 1996 the government heaped benefits on low-income individuals, crippling them in a cycle of dependency, and providing no incentives for state and local governments to help their citizens get jobs. And with last weeks bill, it seems we are turning back the clock and reinstating these failed policies again.

For more information about how the “stimulus” bill abolished welfare reform and adds new welfare spending, click here.


Secretary of State Hillary Clinton is travelling to Asia this week to reaffirm Washington’s commitment to a predominant role in the region.  More info on her trip is found here and here.

Edwin J. Feulner, President of the Heritage Foundation, calls on Congress and the Administration to live up to their promises and stated ideals.

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