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The Third Rail: Welfare Reform

The Current Issue
As deficits have climbed to record highs, and the government is borrowing almost thirty-three cents for every dollar it spends, money that frequently comes from countries that do not have the United States’ best interests at heart, it is critical for the United States to stop spending so much money. Expenditures must be slashed and the federal budget trimmed, in order to not only bring spending into parity with governmental inflows, but also to drive government spending down to the point where we can begin to pay down the national debt. 

Our children and their children deserve to live in a country that is not crippled by massive amounts of debt to our enemies. But in order to do this, the next administration must aggressively move to contain welfare costs, which are spiraling out of control. The growth of the welfare state has created a debt crisis that is not only majorly affecting the United States, but many other countries as well. We must bring under control welfare costs, moving people off of it while still ensuring that those who cannot take care of themselves are provided for.

            Massive federal debt affects the country negatively in a number of ways; including inflation, higher taxes, and indebtedness to nations unfriendly to the United States’ best interests. Any of these three poses a serious deleterious effect to the economic freedom and security of the United States of America; all three together could prove to be permanently devastating in the long run. Serious leadership will be needed to overcome these challenges, and it will not be easy, nevertheless the issue is so pressing that it cannot be put off, “kicked down the road” any further. President Obama has badly damaged America's national security with many ill considered plans, but none have been more hurtful than his gargantuan attack on the future of this country through his reckless spending. 

The Size of the Debt
America’s current debt stands at many trillions of dollars, and is increasing every year. Under President Obama and his Keynesian cronies, American debt has increased by leaps and bounds over what any previous administration has done. 
This weight of debt worries the American people; a Pew poll from January 2013 found that more than seventy percent of Americans said that reducing the debt should be an administration’s top priority

Clearly, Americans will respond well to an administration taking a commanding lead in aggressively attacking this problem. The largest portion of the federal government’s budget is consumed by entitlement programs, and welfare is the first one that can be dealt with. It is not an easy problem to solve, but welfare can be gotten under control and the economy as a whole will benefit from the reduced load in federal spending. 

The way to do this is to keep the focus on the facts of the case, without allowing the argument to descend into an issues based morass, where fact play a secondary consideration at best. And as we all know, where liberals are concerned facts matter not, only emotion and rhetoric.

Welfare Today
Welfare in the United States has reached a level to where it actually provides a marked disincentive to work, especially in states where the level of welfare payments is so high, as to make it almost impossible for an entry level worker to leave welfare and begin taking a paycheck without taking a marked decrease in earnings. According to a 2013 study by the Cato Institute, there are an astonishing 126 separate federally administered programs aimed at combating poverty. This is just at the federal level; there are also state, municipal, and county welfare programs as well. 

According to the study, welfare recipients in 35 states earn an increased income over the majority of entry-level jobs available to the average welfare receiver, with thirteen states paying more than fifteen dollars an hour. The gap between entry level earnings and welfare also is found in the fact that in the United States, welfare is not taxed. Since a paycheck is taxed for, especially for  FICA and Social Security, this has created an even wider gap between anticipated earnings for welfare receivers and entry level workers, which gap has only increased in recent years.

            In high welfare states such as Hawaii, the yearly value of welfare aid that a single typical recipient can receive equals 49,175 dollars of non-taxable income. The next highest two were the District of Columbia, with 43,099 dollars a year, and Massachusetts, with 42,515 dollars a year. It is certain that those who are unable to provide for themselves should be provided for, but when the bottom rung of the economic ladder that is available to them represents a drastic cut in income, it creates a marked economic incentive to avoid leaving the welfare rolls. We must work to cut back the size and scale of these programs, in order to provide positive economic incentives for welfare recipients to move themselves into a position of economic independence. Specifically, welfare recipients should not be placed in a position where finding a job requires them to accept a loss of income.

Welfare Affects Everyone
Americans must understand the fact that welfare affects everyone in America, whether or not they actually receive it. Indeed, the middle class is often the most affected, as they see a sizable percentage of their paychecks garnished for social welfare programs. As one author put it, “everyone pays taxes for Social Security, Medicare and many other…programs that trap them all in the welfare state.”  Americans as a whole must deal with the results of losing a good section of their paycheck, which leaves them with less money for discretionary spending, reduces their financial cushion, and for those at the very bottom of the work ladder, leaves their financial security a matter of instability.

This is not about shifting the economy to benefit one set of people, this is about growing the economy to benefit every single economic strata.

            Money that is spent on welfare is money that is not spent on paying down the federal debt, reducing taxes, or national defense; it is thus important for the next administration to work to ensure America’s welfare model is reformed in order to function as the safety net, not a form of early retirement on the public dole. 

The people of America are the world’s most charitable, and working to reduce the growth of welfare is not a matter of abandoning the needy and helpless, it is a matter of pruning back a massively overgrown system that damages those who it allegedly seeks to help. A citizen who is unable to leave the welfare system is an economic drain that can turn into a generation’s long trap.

 Given the opportunity, the majority of current welfare recipients will exchange their welfare check for a paycheck, but they must have the opportunity and economic incentive to do so. The Cato Institute study found that currently, only 42 percent of adults receiving welfare have any sort of job, which figure includes those who are training or job searching. We must pursue and support policies that will increase this figure, and one of the primary ways to do that is by reducing the multitude of overlapping agencies that oversee federal welfare largess, as well as reducing the payouts of welfare.

Prior Welfare Reform
The 1996 welfare reform signed into law by President Clinton proved a resounding success. By adding work requirements as well as time limits, welfare recipients were economically motivated to push to leave the welfare rolls and they did. Unfortunately, the reforms only targeted one of the 157 poverty programs, leaving 156 still untouched. This provides a good foundation to build on, but much more needs to be done.

Consolidation and Renovation
In a study published by the Carlson Center for Welfare Reform, authors Carleson and Mashburn laid out a blueprint for overhauling the welfare system, and it is a blueprint that is sound, takes care of the needy still, and is carefully based on facts. They target 30 programs that provide no direct assistance to any individual classified as poor and cost the nation 849 million dollars a year. In total, they identify a total of 157 welfare programs that can be completely eliminated or reformed in such a manner as to save the American taxpayers two trillion dollars in the next ten years. Their reforms are sensible and doable, and there is no excuse for not putting them into action. Our children's security depend on this. 


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