Monday, November 5, 2012

Low-Income Programs are Not the Cause of our Long-Run Fiscal Problem

Low-Income Programs are Not the Cause of our Long-Run Fiscal Problem:
Despite what Republicans would like you to believe in their quest to support
tax cuts for the wealthy with cuts to social programs, programs that help low-income households are not the source of our long-run fiscal problem:

Are
Low-Income Programs Enlarging the Nation’s Long-Term Fiscal Problem?, by Robert
Greenstein and Richard Kogan
: Several conservative analysts and some
journalists lately have cited figures showing substantial growth in recent years
in the cost of federal programs for low-income Americans. ... These figures can create the
mistaken impression that growth in low-income programs is a major contributor to
the nation’s long-term fiscal problems.


In reality, virtually all of the recent growth in spending for low-income
programs is due to two factors: the economic downturn and rising costs
throughout the U.S. health care system, which affect costs for private-sector
care as much as for Medicaid and other government health care programs.


The first cause — increased spending on safety net programs because of the
recession — is temporary. Congressional Budget Office (CBO) projections show
that federal spending on low-income programs other than health care has
already started to decline and will fall substantially as a percent of gross
domestic product (GDP) as the economy recovers. By the end of the decade, it
will fall below its average level as a percent of GDP over the prior 40
years, from 1972 to 2011. (See Figure 1.) Since these programs are not rising as
a percent of GDP, they do not contribute to our long-term fiscal problems.



...The above figures include expenditures for both mandatory (entitlement)
and discretionary (annually appropriated) programs. ...



DIGITAL JUICE

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