Spending for Federal Benefits and Services for People with Low Income, FY2008-FY2011: An Update of Table B-1 from CRS Report R41625, Modified to Remove Programs for Veterans

This memorandum provides information on federal spending for programs explicitly intended for people with low or limited income.

MEMORANDUM To: October 16, 2012 Senate Budget Committee Attention: From: Subject: Spending for Federal Benefits and Services for People with Low Income, FY2008FY2011: An Update of Table B-1 from CRS Report R41625, Modified to Remove Programs for Veterans This memorandum provides information on federal spending for programs explicitly intended for people with low or limited income. The memorandum primarily includes a detailed table (Table 2) that shows federal spending for these programs in each of FY2008 through FY2011, with spending under the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) identified separately. The table is an update of Table B-1 in CRS Report R41625, Federal Benefits and Services for People with Low Income: Programs, Policy, and Spending. Readers are referred to that report for important context and descriptions of the included programs and their categories (e.g., health, cash aid, food assistance, etc.). That report also includes a methodology appendix, a version of which appears at the end of this memo. As you specifically requested, programs for veterans have been removed from the table in this memo. Table B-1 in the CRS report referenced above included means-tested health care for veterans without service-connected disabilities (Priority Group 5) and the means-tested veterans pension program. As the memorandum shows, federal spending for low-income programs – not including the two veterans programs mentioned above – grew by 23% from FY2008 ($563 billion) to FY2009 ($692 billion). FY2009 also was the first year of ARRA funding, which accounted for at least 65% of the increase in spending for these programs from FY2008 to FY2009.1 Some portion of the non-ARRA-related spending growth in FY2009 was attributable to increased caseloads for recession-sensitive programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). The memorandum further shows that federal spending for low-income programs grew at much slower rates in FY2010 and FY2011. Without the two veterans programs, spending totaled $733 billion and $746 billion in those years, respectively, increasing by 6% between FY2009 and FY2010 and by 2% between FY2010 and FY2011. ARRA was a declining but still significant source of the increased spending in these 1 Readers should note that ARRA spending is actually understated in this memorandum. ARRA included provisions that expanded the Earned Income Tax Credit and the Additional Child Tax Credit, but the increased spending for these two programs attributable to the ARRA provisions is not shown separately. Congressional Research Service 7-5700 www.crs.gov Congressional Research Service 2 two years, representing at least 58% of the increase between FY2010 and FY2009 pre-ARRA levels, and at least 45% of the increase between FY2011 and FY2010 pre-ARRA levels. This memorandum does not attempt to quantify nonfederal spending related to federal programs for limited-income populations. However, a significant amount of such spending occurs. Many low-income programs have provisions that require states or other grantees to match federal funds with a specified amount of nonfederal resources (“matching” requirements), or require grantees to maintain the same level of their own spending that occurred in a previous year (“maintenance-of-effort” provisions), or prohibit grantees from substituting federal funds for nonfederal funds that would have been available otherwise (“supplement, not supplant” provisions). Prominent examples of such programs include Medicaid (a federal-state matching program), the Temporary Assistance for Needy Families (TANF) block grant (which has a maintenance-of-effort requirement), and Title I-A of the Elementary and Secondary Education Act (which prohibits supplantation of nonfederal funds). Table 1 provides a summary of federal low-income spending for each of the four years, broken down by category. The table shows the largest category of spending – health – was 37% higher in FY2011 than in FY2008, primarily due to increased spending for Medicaid. Cash aid is the second largest category and was 12% higher in FY2011 than in FY2008, while spending for the third largest category – food assistance – was 71% greater in FY2011 than in FY2008, largely due to growth in SNAP. Education was 57% higher in FY2011, almost exclusively due to growth in Pell grants. Housing and development (which was similar in size to education in FY2008) was only 2% greater in FY2011 than in FY2008, although this category saw significant growth in FY2009 before declining in the next two years. Social services spending in FY2011 was 3% higher than in FY2008; spending for employment and training was the same in each of the two years (although it rose in the intervening years); and the smallest category – energy assistance – was 67% higher in FY2011 than in FY2008. Energy assistance was also the most volatile over the period, more than tripling between FY2008 and FY2009, from $3 million to $10 million, and then declining to $6 million in FY2010 and $5 million in FY2011. Table 1. Federal Spending by Major Category on Benefits and Services for People with Low Income (excluding programs for veterans), FY2008-FY2011, including ARRA (nominal dollars in billions) Category FY2008 FY2009 ARRA FY2009 FY2010 ARRA FY2010 FY2011 ARRA FY2011 Health 248 308 (35) 335 (41) 339 (26) Cash Aid 130 125 (*) 141 (2) 145 (0) Food Assistance 59 78 (5) 94 (11) 101 (12) Education 42 58 (19) 58 (8) 66 (0) Housing & Development 40 60 (14) 52 (6) 46 (*) Social Services 36 44 (4) 40 (4) 37 (0) Employment & Training 6 9 (2) 8 (1) 6 (0) Energy Assistance 3 10 (5) 6 (*) 5 (0) 563 692 (84) 733 (72) 746 (38) TOTAL Congressional Research Service 3 Source: Prepared by the Congressional Research Service (CRS) from obligations data contained in the U.S. Budget Appendix for each of FY2010 through FY2013. Amounts may not total due to rounding. Notes: * indicates amounts that round to less than $1 billion. ARRA = American Recovery and Reinvestment Act, P.L. 111-5. Amounts shown for ARRA spending in selected fiscal years are included in the totals shown for each of those years. The FY2008 amount for cash aid includes an unspecified amount for a one-time $300-per-child tax rebate, authorized under the Economic Stimulus Act of 2008 (P.L. 110-185), which was not targeted on low-income families. ARRA spending for cash aid is understated because disaggregated EITC and ACTC spending due to temporary program expansions enacted in ARRA is not available; these amounts are included in the totals for cash aid, but not in the ARRA columns. As requested, the table does not include spending for means-tested health care for veterans (Priority Group 5) or the meanstested veterans pension program; these programs would have increased spending in the health and cash aid categories. As noted earlier, Table 2 is an update of Table B-1 in CRS Report R41625, modified to remove the two veterans programs. The original table shows spending for individual programs in FY2008 and FY2009; this memorandum updates that table through FY2010 and FY2011. In a few cases, the amounts shown for FY2008 and FY2009 have been revised based on newer data. In the future, CRS may complete a full update of Report R41625, in which case data and methodologies might change. An explanation of the methodology follows Table 2. It has been adapted from the methodology appendix of the original CRS report. Table 2. Spending for Federal Benefits and Services for People with Low Income, by Program (excluding programs for veterans): FY2008-FY2011, including ARRA (new obligations, unless otherwise noted; nominal dollars in millions) Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 ARRA (included in FY2011) Health Care Family Planning HHS 300 307 Consolidated Health Centers HHS 2,021 3,665 Transitional Cash and Medical Services for Refugees HHS 296a 282a 353a 353a State Children’s Health Insurance Program (CHIP) HHS 6,360 9,534 10,717 8,740 Voluntary Medicare Prescription Drug Benefit—Low-Income Subsidy HHS 17,400b 20,300b 20,900b 22,300b Medicaid HHS 214,015 265,058 Ryan White HIV/AIDS Program HHS 2,141 2,227 2,286 2,310 Breast/Cervical Cancer Early Detection HHS 201a 206a 169a 164a Maternal and Child Health Block Grant HHS 666 662 661 656 Indian Health Service HHS 4,347 5,416 294 5,668 5,544 247,747 307,657 34,701 334,580 Health Care, subtotal CRS-4 316 1,519 32,888 3,049 290,461 298 908 39,670 40,578 3,295 295,836 339,496 74 26,181c 26,255c Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 1,995d 6,594d ARRA (included in FY2011) Cash Aid Temporary Assistance for Needy Families (TANF) (cash aid) HHS Supplemental Security Income SSA 48,926 52,446 54,463 59,854 Additional Child Tax Credite IRS 34,019f 24,284 22,659 22,691 Earned Income Tax Credit (refundable component)g IRS 40,600 42,418 54,712 55,652 129,901 125,489 Cash Aid, subtotal 6,356d 6,341d 378d 378 9,118d 140,952 1,995 144,791 68,192 10,764 74,943 Food Assistance Supplemental Nutrition Assistance Program (SNAP) USDA 37,179 53,396 School Breakfast Program (free/reduced price components) USDA 2,307 2,513 2,811 2,987 National School Lunch Program (free/reduced price components) USDA 7,863 8,498 9,462 9,831 Special Supplemental Nutrition Program for Women, Infants and Children (WIC) USDA 6,400 7,028 Child and Adult Care Food Program (lowerincome components) USDA 2,029 2,217 Summer Food Service Program USDA 312 356 374 377 Commodity Supplemental USDA 141 165 183 196 CRS-5 4,478 72 7,245 2,358 64 7,300 2,499 11,896 Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 ARRA (included in FY2011) Food Program Nutrition Assistance for Puerto Rico USDA 1,623 2,000 240 2,000 254 2,001 The Emergency Food Assistance Program (TEFAP) USDA 240 425 125 359 55 298 Nutrition Program for the Elderly HHS 756 905 97 845 58,850 77,503 5,012 93,829 Food Assistance, subtotal 848 11,137 101,280 Education Indian Education DOI 684 699 784 753 Adult Basic Education Grants to States ED 555 572 628 596 Federal Supplemental Educational Opportunity Grant ED 759 760 759 740 Education for the Disadvantaged—Grants to Local Educational Agencies (Title I-A) ED 13,352 21,495 Title I Migrant Education Program ED 380a 395a 395a 394a Higher Education— Institutional Aid and Developing Institutions ED 755 801 764 833 Federal Work-Study ED 989 1,156 995 986 Federal TRIO Programs ED 885 905 910 883 Federal Pell Grants ED 18,000 26,019 8,497 32,905 Education for Homeless Children and Youth ED h 135 70 h CRS-6 9,936 200 14,526 64 7,786 14,472 41,458 h 11,896 Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 21st Century Community Learning Centers ED 1,082 1,127 1,166 1,157 Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP) ED 303 313 323 303 Reading First and Early Reading First ED 560 129 0 0 Rural Education Achievement Program ED 172 174 175 175 Mathematics and Science Partnerships ED 182 176 180 179 Improving Teacher Quality State Grants ED 2,946 2,687 2,955 2,460 Academic Competitiveness and Smart Grant Program ED 297 690 918 350 41,901 58,233 Education, subtotal 18,703 58,383 7,850 65,739 Housing and Development Single-Family Rural Housing Loans USDA 235i Rural Rental Assistance Program USDA 479 902 Water and Waste Disposal for Rural Communities USDA 685 1,370 631 1,443 Public Works and Economic Development DOC 170 285 147 149 115 Supportive Housing for the Elderly HUD 778 800 580 509 Supportive Housing for HUD 256 284 216 149 CRS-7 331i 506i 121i 979 954 556 648 ARRA (included in FY2011) Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 ARRA (included in FY2011) Persons with Disabilities Section 8 Project-Based Rental Assistance HUD 7,004 9,391 1,991 8,991 19 9,444 Community Development Block Grants HUD 3,645 4,733 965 3,956 18 3,341 Homeless Assistance Grants HUD 1,538 2,861 1,485 1,813 7 1,888 Home Investment Partnerships Program (HOME) HUD 1,647 1,911 1,857 1,495 Housing Opportunities for Persons with AIDS (HOPWA) HUD 310 318 314 352 Public Housing HUD 6,894 10,843 3,977 7,360 6,999 Indian Housing Block Grants HUD 556 1,149 500 762 Section 8 Housing Choice Vouchers HUD 15,552 16,289 18,071 Neighborhood Stabilization Program-1 HUD j 3,920 1,980 Grants to States for LowIncome Housing in Lieu of Low-Income Housing Credit Allocations Treasury j 2,465 2,465 3,083 Tax Credit Assistance Program HUD j 2,250 2,250 0 39,749 60,102 14,411 52,060 Housing and Development, subtotal CRS-8 6 663 3 18,510 1,980 3,083 969 160 0 5,669 46,317 3 Program Federal Agency FY2008 FY2009 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2011 Social Services Indian Human Services DOI 118 115 118 115 Older Americans Act Grants for Supportive Services and Senior Centers HHS 351 361 368 369 Older Americans Act Family Caregiver Program HHS 153 154 154 154 Temporary Assistance for Needy Families (TANF) (social services) HHS 9,416k 10,594k Child Support Enforcement HHS 4,585 4,719 Community Services Block Grant HHS 654 1,692 992 708 8 678 Child Care and Development Fund HHS 4,979 7,034 1,990 5,083 10 5,152 Head Start HHS 6,877 9,077 578 8,757 1,523 7,559 Developmental Disabilities Support and Advocacy Grants HHS 111 114 116 116 Foster Care HHS 4,525 4,705 4,603 4,456 Adoption Assistance HHS 2,038 2,324 2,438 2,362 Social Services Block Grant HHS 1,700 2,300 1,700 1,700 Chafee Foster Care Independence Program HHS 140 140 140 140 Emergency Food and Shelter Program FEMA 153 300 200 121 CRS-9 232k 9,837k 2,120k 5,044 100 8,828k 4,671 ARRA (included in FY2011) Program Legal Services Corporation Federal Agency LSC Social Services, subtotal FY2008 FY2009 351 392 36,151 44,021 ARRA (included in FY2009) FY2010 ARRA (included in FY2010) 422 3,892 39,688 FY2011 406 3,661 36,827 Employment and Training Supplemental Nutrition Assistance Program (SNAP) (employment and training component) USDA 351 367 344 354 Community Service Employment for Older Americans HHS 504 708 820 454 Workforce Investment Act (WIA) Adult Activities DOL 827 1,357 495 862 766 Workforce Investment Act (WIA) Youth Activities DOL 984 2,218 1,182 994 946 Social Services and Targeted Assistance for Refugees HHS 203a 203a 203a 202a Temporary Assistance for Needy Families (TANF) (employment and training) HHS 1,697l 1,826l Foster Grandparents CNCS 109a 109a Job Corps DOL 1,558 1,804 148 1,713 102 1,777 6,233 8,592 1,831 7,729 689 6,455 517 228 234 Employment and Training, subtotal 6l 2,682l 587l 111a 1,845l 111a Energy Assistance Weatherization Assistance Program CRS-10 DOE 291 5,240 4,748 ARRA (included in FY2011) Program Low-Income Home Energy Assistance Program (LIHEAP) Federal Agency HHS Energy Assistance, subtotal TOTAL ARRA (included in FY2009) FY2010 ARRA (included in FY2010) FY2008 FY2009 2,590 5,100 2,881 10,340 4,748 5,617 228 4,935 $563,413 $691,937 $83,676 $732,838 $71,807 $745,840 5,100 FY2011 ARRA (included in FY2011) 4,701 $38,154c Source: Prepared by the Congressional Research Service from obligations data contained in the U.S. Budget Appendix for FY2010, FY2011, FY2012, and FY2013, unless otherwise noted. This table is an updated version of Table B-1 in CRS Report R41625, Federal Benefits and Services for People with Low Income: Programs, Policy, and Spending, FY2008-FY2009, modified to remove means-tested health care for veterans (Priority Group 5) and the means-tested veterans pension program. Readers are referred to that report for important context and program descriptions. An updated version of the methodology appendix of that report is included in this memorandum. In the future, CRS may complete a full update of Report R41625, in which case data and methodologies might change. Notes: HHS = Department of Health and Human Services. SSA = Social Security Administration. IRS = Internal Revenue Service. USDA = Department of Agriculture. DOC = Department of Commerce. HUD = Department of Housing and Urban Development. Treasury = Department of the Treasury. DOI = Department of the Interior. ED = Department of Education. FEMA = Federal Emergency Management Agency. LSC = Legal Services Corporation. DOE = Department of Energy. DOL = Department of Labor. CNCS = Corporation for National and Community Service. a. Appropriations. b. Aggregate reimbursements for calendar year. c. Includes Medicaid spending at the enhanced matching rate authorized by ARRA through December 2010, and continued at a phased-down level for January-June 2011 under P.L. 111-226. d. Estimated obligations for cash aid and administration under TANF, based on state reporting of actual expenditures. e. Amounts shown for ACTC include spending due to program expansions enacted in ARRA; however, disaggregated amounts specifically due to these provisions are not available. f. Includes an unspecified amount for a one-time $300-per-child tax rebate that was not targeted on low-income families. g. Amounts shown for EITC include spending due to program expansions enacted in ARRA; however, disaggregated amounts specifically due to these provisions are not available. h. Obligations totaled $64 million for this program in FY2008, which is below the dollar threshold for inclusion in the table. This funding is not included in spending totals. (See discussion of methodology for explanation of threshold.) i. Subsidy outlays, adjusted for net lifetime reestimate amounts, excluding interest. j. Program not authorized. k. Estimated obligations for social services under TANF, based on state reporting of actual expenditures. l. Estimated obligations for employment and training activities under TANF, based on state reporting of actual expenditures. CRS-11 CRS-12 Congressional Research Service 13 Methodology Selection of Programs Programs were selected for inclusion in CRS Report R41625 if – at the time the report was prepared in 2010-2011 – they (1) had provisions that base an individual’s eligibility or priority for service on a measure (or proxy) of low or limited income; or (2) target resources in some way (e.g., through allocation formulas, variable matching rates) using a measure (or proxy) of low or limited income. A few programs without an explicit low-income provision were included because either their target population is disproportionately poor or their purpose clearly indicates a presumption that participants will be low-income. Such programs that serve disproportionately low-income people include the Indian Health Service, Homeless Assistance Grants, Indian Education, Title I Migrant Education Program, and Indian Human Services. Programs with purposes that presume a low-income target population include Adult Basic Education and Social Services Block Grants. Federal student loan programs were considered for inclusion because they determine benefit levels through the same need analysis system that is used for Pell Grants and several smaller postsecondary education programs. However, this system can result in students from relatively well-off families receiving assistance, as there is no absolute income ceiling on eligibility. Pell Grants are structured in such a way that the majority of recipients are low-income and the lowest-income students receive the largest benefits. Student loan programs are not as strongly targeted and therefore, were not included in the report. On the other hand, deliberations about whether to include the Additional Child Tax Credit (ACTC) reached a different conclusion. The regular Child Tax Credit (CTC) is a nonrefundable credit and phases out at relatively high income levels. The ACTC is a refundable credit that allows families with no or insufficient tax liability to get all or part of the benefit they would otherwise receive from the CTC. Because of the refundable nature and other design features of the ACTC, including certain recently enacted changes, it serves predominantly low-income families. For example, for tax year 2008, 87% of returns that claimed the ACTC were filed by families with adjusted gross incomes (AGI) below $40,000 and 83% of the credit went to such families; 94% of returns that claimed the ACTC were filed by families with AGI below $50,000 and 93% of the credit went to such families.2 Thus, ACTC is included in the report. Finally, regarding the selection of programs for this memorandum, please note that – as you requested – we have deleted the two veterans programs that were included in the original Table B-1 from CRS Report R41625: means-tested health care for veterans without service-connected disabilities (Priority Group 5 veterans) and the means-tested veterans pension program. Categorization of Programs Most programs are easily assigned to broad categories, such as health, cash aid, food assistance, or education. A few, however, have multiple purposes or allowable activities. For some of those programs, spending can be disaggregated into the relevant categories. For example, using state reporting of actual 2 Internal Revenue Service, SOI Tax Stats – Individual Income Tax Returns Publication 1304, Table 3.3. Congressional Research Service 14 expenditures, it is possible to estimate the amount of Temporary Assistance for Needy Families (TANF) obligations attributable to cash aid, social services, and employment and training. Other programs cannot be disaggregated, however, and must be assigned to a single category. For example, Transitional Cash and Medical Services for Refugees was categorized as health care, and Indian Human Services was categorized as social services although it also provides cash and housing assistance. The social services category, in general, is not well-defined and some analysts might assign some programs differently. Head Start, for example, could be considered an education program, since its purpose is to promote school readiness; however, it supports a very broad range of activities—including activities for children age 0-3 through its Early Head Start component—that can best be characterized collectively as social services. Foster Care and Adoption Assistance both give cash to families or other care providers, but income support is not the programs’ purpose or sole use of funding. Foster Care subsidizes maintenance payments and administrative activities on behalf of children who cannot remain safely at home, and Adoption Assistance makes payments to facilitate the adoption of children who would otherwise lack permanent homes. Thus, these programs were categorized as social services and not cash assistance. Selection of Spending Measure New obligations incurred in the indicated fiscal year were chosen as the measure of spending for the report, although for many programs, readers may be more accustomed to seeing appropriations (budget authority) or outlays. These spending concepts are related. Congress and the President enact budget authority through appropriations measures or other authorizing laws. Budget authority in turn allows federal agencies to incur obligations, through actions such as entering into contracts, employing personnel, and submitting purchase orders. Outlays represent the actual payment of these obligations, usually in the form of electronic transfers or checks issued by the Treasury Department.3 Obligations are used here because they are the most consistent measure available at the necessary level of detail for the majority of programs. The source of obligations data was the U.S. Budget Appendix for FY2011 (for final FY2009 obligations) and FY2010 (for final FY2008 obligations). Likewise, for the updated version of Table B-1, the Budget Appendixes for FY2012 and FY2013 were used (for final FY2010 and FY2011 obligations). Obligations were either not available or not appropriate for a small number of programs. Because obligations were not available at the necessary program level, appropriations were used for the following: Transitional Cash and Medical Services for Refugees, Breast/Cervical Cancer Early Detection, the Title I Migrant Education Program, Social Services and Targeted Assistance for Refugees, and Foster Grandparents. The Budget Appendix does not show obligations solely for the low-income subsidy portion of the Medicare Part D prescription drug program. Therefore, the table uses aggregate reimbursements for the low-income subsidy for the calendar year (instead of fiscal year), available from the annual report of the Medicare trustees.4 3 4 See CRS Report 98-410, Basic Federal Budgeting Terminology, by Bill Heniff Jr. 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table IV.B.11. Congressional Research Service 15 Loan subsidy outlays were used as the more appropriate measure of spending for the Section 502 singlefamily rural housing loan program. Direct and guaranteed loan subsidy outlays, available from the Budget Appendix, were adjusted for re-estimates provided in the Federal Credit Supplement to the U.S. Budget for the relevant years. Finally, as noted above, TANF obligations provided in the Budget Appendix were disaggregated into the categories of cash aid, social services, and employment and training, based on states’ reporting to the Department of Health and Human Services of their actual expenditures. Spending Threshold Programs were included in the report if they had obligations in either FY2008 or FY2009 of at least $100 million. To simplify the analysis without significantly changing the overall picture, smaller programs were excluded, even if they met the low-income criteria. No changes have been made to the list of programs included in the updated version of the table. Only one program included in the report (and the updated table) —Education for Homeless Children and Youth—had spending above the threshold in one year but below the threshold in the others. Therefore, spending totals for FY2009 include obligations for this program, but spending totals for FY2008, FY2010, and FY2011 do not. Thus, each year’s spending total is a snapshot of spending in that year for low-income programs which—in that year—had obligations totaling at least $100 million.