Comparing Presidents, Welfare

This post is on spending on the amount spent on welfare and how its changed by Presidential administration since the early 1950s. Welfare is financial assistance provided by the government. The definition is a bit nebulous… I decided to use the following federal outlays (data from White House Office of Management and Budget Table 11.3:

1. Unemployment Assistance
2. Medical Care
3. Assistance to Students (not counting Veterans)
4. Housing Assistance
5. Public Assistance and Related

This does not include Social Security
I left out student assistance to veterans –

Public Assistance and related, in turn, includes:
a. Supplemental security income program
b. Family support payments to States and TANF
c. Low income home energy assistance
d. Earned income tax credit
e. Legal services
f. Payments to States for daycare assistance
g. Veterans non-service connected pensions
h. Payments to States—Foster Care/Adoption Assist.
i. Payment where child credit exceeds tax liability
j. Refundable AMT credit
k. Other public assistance

I did not include social security and railroad retirement, or federal employees retirement and insurance as these were paid for at least by those receiving the payments. I also left out assistance to student that were veterans – my assumption was that such payment could be construed as service connected. I also left out one-off payments – such as to Japanese American WW2 internees, September 11 survivors, and the like.

Below are two graphs… the first shows welfare as a percent of total federal outlays and the second shows grants to state and local as a percent of total GDP.

Here are summary tables to match…

So, wattup ma peeps? Well, most people would be surprised to see Carter producing the smallest increase in welfare as a percent of the budget, and Clinton the only President to cut welfare as a percent of GDP. Certainly, most people would be surprised to see them increase welfare spending less than, say, Ronald the Reagan. The big spenders seem to be Nixon/Ford, followed by GHW, followed by (depending on how you measure it) either JFK/LBJ or Ike.

Why the results under Carter and Clinton? In a word, income. Under Clinton real median income growth was second fastest in the sample, after JFK/LBJ, and he had the fastest growth rate of real median income less taxes and the change in real federal debt per capita. Put another way, even taking into account future tax obligations, the median American did better under Clinton and Carter than under other administrations. That said, the median person is probably not the one Presidents should focus on – poverty increased a lot under Carter.

(And yes, the Welfare Reform Act probably did help keep welfare expenses down under Clinton, but astute observers might note that the Welfare Reform Act has not been abolished and figures look a bit different now that GW is in office.)

Real median income less taxes and the change in real federal debt per capita doesn’t explain everything… JFK/LBJ came in third by that measure, and they came out in the middle of the pack when it comes to welfare. My guess… War on Poverty… in fact, some of the welfare payments may in fact be responsible for some of the rise in income under JFK/LBJ.

Among Republicans… well, the median person did worse under GHW than any other President as did the poverty rate, explaining why GHW spent so much on welfare… but that doesn’t explain Nixon/Ford spending more. My guess… coming so shortly on the heels of JFK/LBJ, Nixon/Ford were likely to continue some of the programs that had begun under the previous administration.

Anyway, I clearly don’t have the whole story down. Take a crack at it in comments.

Next post in this series… given the recent bridge collapse, and the whole Katrina debacle, I’m going to look for data on physical infrastructure investment. Hopefully I’ll have that early next week.