Federal Spending on Benefits and Services for People with Low Income: In Brief

February 6, 2018 R45097

Need-Tested Programs; Means-Tested Programs; Poverty; Low-Income; Cash Assistance; Medical Assistance; Housing Assistance; Educational Assistance; Social Services; Employment and Training.

Federal Spending on Benefits and Services for People with Low Income: In Brief

February 6, 2018 (R45097)

Contents

Introduction

The Congressional Research Service (CRS) regularly receives requests about spending on programs that target low-income individuals and families for benefits and services. CRS has produced a series of reports that identify these programs and provides their spending amounts and recent spending trends. The most recent of this series is CRS Report R44574, Federal Benefits and Services for People with Low Income: Overview of Spending Trends, FY2008-FY2015. This In Brief report provides an interim update of the federal spending information in R44574 by extending it to include FY2016, the most recent year for which the federal spending data were available as of January 2018.

In FY2016, the federal government spent $877.5 billion on benefits and services for people with low income. This was a 3.5% increase from the prior fiscal year. The increase was faster than both the rate of inflation over the year (1.2%) and the rate of economic growth (2.8%).1

Concepts Used in this Report, and Caveats

Programs were included in this report series if they (1) have provisions that base an individual's eligibility or priority for service on a measure (or proxy) of low income; (2) target resources in some way (e.g., through allocation formulas, variable matching rates) using a measure (or proxy) of low income; or (3) prioritize services to low-income segments of a larger target population. The programs in this report also had spending in excess of $100 million. A program's spending is not added to the aggregate spending numbers if it did not have $100 million in spending for a given year.

Additionally, please consider the following:

  • Programs included here are not social insurance. That term refers to programs intended to insure Americans against the loss of wages and work-related benefits due to retirement, disability, or temporary unemployment (e.g., Social Security, Medicare, Unemployment Insurance). Social insurance benefits are generally entitlements earned through work.
  • Programs in this report cannot be collectively characterized as welfare. Welfare is typically thought of as government assistance to help poor people pay for necessities. As defined in this report, low-income programs are much broader, and include in-kind benefits and activities such as education, social services, and community development, among others.
  • Low income does not necessarily mean poor, as the federal government officially defines that term. Programs in this report use a variety of criteria to determine eligibility, including multiples of the official federal poverty guidelines and other measures altogether. At the same time, to be included in this report, the program must have a low-income focus. For example, the refundable tax credit and cost-sharing subsidies that help pay health insurance premiums under the Affordable Care Act (ACA) are not included in this report, as their benefits begin at 100% of the federal poverty level.
  • While this report discusses trends in federal spending, a significant amount of non-federal spending (primarily state and local) is also associated with some of the programs included here. Thus, amounts discussed do not reflect all public spending for low-income programs.
  • Unless noted otherwise, all spending amounts cited in this report are nominal dollars and not adjusted for inflation. Most of the information is based on program-level obligations found in the Budget of the United States. Some exceptions are noted in CRS Report R44574.

While the programs in this report share the common feature of an explicit low-income focus, the individual programs are highly diverse in their purpose, design, and target population. They were established at different times, in response to different policy challenges. In terms of target population, the largest portion of low-income assistance goes to families with children with working parents and the disabled (see CRS In Focus IF10355, Need-Tested Benefit Receipt by Families and Individuals).

Trends in Spending on Federal Benefits and Services for People with Low Income

Figure 1 shows the trend in federal spending on benefits and services for people with low income for FY2008 through FY2016. The early portion, FY2008 through FY2011, represents a period of time where spending increased because of automatic or legislated responses to the recession of 2007 through 2009. The largest low-income assistance programs are entitlements, and their spending increased automatically as more people became eligible for their benefits as incomes fell due to the recession. Additionally, Congress and the President responded to the recession with time-limited expansions or funding increases in some of these programs in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). Total spending on these programs increased by 36% over this period.

Federal spending on benefits and services for low-income people stabilized in FY2011 and FY2012 as ARRA expired and other spending increases associated with the recession abated. However, from FY2012 through FY2016 spending for these programs increased at a steady pace, stemming from increases in spending on health care for low-income people.

Figure 1. Federal Spending on Benefits and Services for People with Low Income, FY2008-FY2016

Source: Prepared by the Congressional Research Service (CRS) from information contained in federal budget documents for Presidential budget submissions, FY2010-FY2018.

Federal Spending on Benefits and Services for Low-Income People by Category

CRS's series of reports on benefits and services for low-income people divides spending for the programs into eight categories:

  • health care,
  • cash aid,
  • food aid,
  • education,
  • housing and development,
  • social services,
  • employment and training, and
  • energy assistance.

Table 1 shows federal spending for the programs by category for FY2008 through FY2016. The categories are sorted by the amount of their spending, with the largest (health care) first and the smallest (energy aid) last. Health care represents more than half of total spending for the programs in FY2016 and almost three times the amount of the next largest category, cash aid. The two smallest categories are employment and training programs (exclusive of education spending) and energy assistance.

Table 1. Federal Spending on Benefits and Services for People with Low Income, by Category, FY2008-FY2016

Billions of dollars

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

Health Care

$259.2

$318.8

$347.0

$352.2

$328.1

$344.0

$389.2

$444.2

$467.8

Cash Aid

116.4

129.6

145.3

149.1

142.4

150.3

155.3

154.7

159.4

Food Aid

58.9

77.6

93.9

101.4

104.8

107.1

102.0

103.1

100.7

Education

41.9

58.2

58.6

66.5

58.6

55.1

53.7

52.2

53.7

Housing and Development

39.7

60.0

51.8

46.2

44.0

41.4

45.1

44.6

46.3

Social Services

36.0

43.9

39.7

37.0

36.7

36.7

38.1

38.4

39.4

Employment and Training

6.2

8.6

7.7

6.5

6.1

6.0

6.5

7.0

6.5

Energy Assistance

2.9

10.3

5.6

4.9

3.6

3.4

3.6

3.7

3.6
 

  

  

  

  

  

  

  

  

  

Total

561.2

707.2

749.7

763.7

724.3

744.1

793.6

847.8

877.5

Source: Prepared by the Congressional Research Service (CRS) from information contained in federal budget documents for Presidential budget submissions, FY2010-FY2018.

Figure 2 breaks out total federal spending on benefits and services for people with low income into two groups: health programs and all other programs. As shown in the figure, the increase in spending in the earlier portion of the period (affected by recession-related spending) stemmed from increases in both health and other program spending. However, since FY2012 the increase is attributable to higher spending on health care. Much of this is increased Medicaid spending, and partially reflects increases to states that implemented the Affordable Care Act's (ACA, P.L. 111-148, as amended)2 Medicaid expansion as well as increases in Medicaid spending caused by other factors.3

Figure 2. Federal Spending on Benefits and Services for People with Low Income, Health and Non-health, FY2008-FY2016

Source: Prepared by the Congressional Research Service (CRS) from information contained in federal budget documents for Presidential budget submissions, FY2010-FY2018.

Mandatory and Discretionary Spending

The largest programs providing benefits and services to low-income people are mandatory spending programs. These are programs where spending is controlled by the terms of their authorizing laws—such as entitlements either to individuals or states—rather than the annual appropriation process. Discretionary spending is generally determined through annual appropriations.

Figure 3 shows federal spending in FY2016 on benefits and services for people with low income by category and budget classification (mandatory, discretionary, or some programs have spending classified as both). The largest categories (health, cash aid, and food aid) are dominated by mandatory spending. Housing is almost entirely discretionary spending, determined through annual appropriations. Education is split between discretionary spending and the Pell Grant program, which has both mandatory and discretionary components. Social services and employment and training have a mix of mandatory spending (much of it coming from the broad-based Temporary Assistance for Needy Families (TANF) block grant) and discretionary funding. Energy assistance is entirely discretionary.

Figure 3. Federal Spending on Benefits and Services for People with Low Income, by Budget Classification, FY2016

Source: Prepared by the Congressional Research Service (CRS) from information contained in federal budget documents for the Presidential budget submission, FY2018.

Federal Spending on Benefits and Services for Low-Income People by Program

Table 2 shows spending for federal benefits and services to low-income persons by program for FY2008 to FY2016. The programs were classified into the eight categories of spending noted above, and are ranked within each category by FY2016 spending. Note that in many categories, spending is dominated by a few large programs. For example, in FY2016, Medicaid accounted for 85% of health care spending, Supplemental Security Income and two refundable tax credits for low-income workers (the Earned Income Tax Credit and the refundable portion of the Child Tax Credit) accounted for 92% of all cash aid, Supplemental Nutrition Assistance Program (SNAP) accounted for 70% of all food aid, and Pell Grants plus aid to school districts with large shares of disadvantaged children accounted for 82% of all education aid.

Most programs had spending that was classified in a single category. The exceptions are the broad-purpose TANF block grant and SNAP. TANF, though best known as a program that provides cash assistance to needy families with children, had $6.4 billion in federal spending on cash aid, making it the fourth largest cash program and accounting for 4% of cash spending. In contrast, TANF spending on social services made it the second largest social services program (behind only Head Start), and its employment and training expenditures made it the largest employment and training program. SNAP spending was divided into its food assistance and its employment and training components. SNAP is the largest food assistance program ($70 billion in food assistance in FY2016), but it also contributed $427 million in employment and training expenditures in FY2016.

Table 2. Federal Spending on Benefits and Services for Low-Income People, by Program, FY2008-FY2016

(Millions of dollars)

Program

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

Health Care

Medicaid

$214,015

$265,058

$290,461

$295,836

$270,914

$286,920

$329,019

$378,896

$398,217

Voluntary Medicare Prescription Drug Benefit—Low-Income Subsidy

18,100

19,600

21,100

22,200

22,500

23,200

24,300

25,600

26,700

State Children's Health Insurance Program (CHIP)

6,360

9,534

10,717

8,740

9,362

9,357

10,111

11,353

14,069

Medical Care for Veterans without Service-Connected Disability

10,246

11,201

11,780

12,000

11,970

11,737

11,921

13,087

13,130

Indian Health Service

4,347

5,416

5,668

5,544

5,729

5,661

5,910

6,074

5,207

Consolidated Health Centers

2,021

3,665

3,049

3,295

3,384

2,882

3,587

4,701

5,040

Ryan White HIV/AIDS Program

2,141

2,227

2,286

2,310

2,367

2,220

2,290

2,318

2,266

State Grants and Demonstrations

556

625

418

758

416

534

524

680

1,536

Maternal and Child Health Block Grant

666

662

661

656

639

605

632

637

637

Transitional Cash and Medical Services for Refugees

296

282

353

353

323

401

391

383

532

Family Planning

300

307

316

298

294

278

286

286

286

Breast/Cervical Cancer Early Detection

201

206

210

206

213

197

207

207

209

Total Health Care

259,249

318,783

347,019

352,196

328,111

343,992

389,178

444,222

467,829

Cash Aid

Supplemental Security Income (SSI)

48,926

52,446

54,463

59,854

53,773

59,756

62,159

62,055

66,751

Earned Income Tax Credit (EITC) (refundable component)

40,600

42,418

54,712

55,652

54,890

57,513

60,087

60,084

60,580

Additional Child Tax Credit (refundable portion)

16,690

24,284

22,659

22,691

22,106

21,608

21,490

20,592

20,188

Temporary Assistance for Needy Families (TANF)

6,364

6,341

9,118

6,594

6,737

6,263

6,340

6,444

6,407

Pensions for Needy Veterans

3,777

4,134

4,345

4,294

4,892

5,195

5,258

5,497

5,468

Total Cash Aid

116,357

129,623

145,297

149,085

142,398

150,335

155,334

154,672

159,394

Food Aid

Supplemental Nutrition Assistance Program (SNAP)

37,179

53,396

68,192

74,943

77,828

79,365

73,721

73,615

70,406

National School Lunch Program (free/reduced price components)

7,863

8,498

9,462

9,831

9,984

10,549

10,801

11,515

11,777

Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

6,400

7,028

7,245

7,300

7,168

6,945

7,019

6,774

6,864

School Breakfast Program (free/reduced price components)

2,307

2,513

2,811

2,987

3,256

3,514

3,618

3,956

4,135

Child and Adult Care Food Program (lower-income components)

2,029

2,217

2,358

2,499

2,616

2,799

2,920

3,154

3,259

Nutrition Assistance for Puerto Rico

1,623

2,000

2,000

2,001

2,000

2,001

1,903

1,951

1,959

Nutrition Program for the Elderly

756

905

817

820

814

765

807

812

834

Summer Food Service Program

312

356

374

377

400

437

464

517

540

The Emergency Food Assistance Program (TEFAP)

240

425

359

298

309

312

318

370

374

Commodity Supplemental Food Program

141

165

183

196

189

187

180

198

223

Fresh Fruit and Vegetable Program

0

0

0

115

157

165

166

139

167

Food Distribution Program on Indian Reservations (FDPIR)

0

119

114

0

103

100

119

143

145

Total Food Aid

58,850

77,622

93,915

101,367

104,824

107,139

102,036

103,144

100,683

Housing

Section 8 Housing Choice Vouchers

15,552

16,289

18,071

18,510

18,316

17,897

19,181

19,333

19,634

Section 8 Project-Based Rental Assistance

7,004

9,390

8,991

9,444

9,311

8,818

9,870

9,810

10,680

Public Housing

6,894

10,843

7,360

6,999

5,847

5,954

6,383

6,421

5,954

Community Development Block Grants

3,645

4,733

3,956

3,341

3,245

2,971

3,213

2,664

3,193

Homeless Assistance Grants

1,538

2,861

1,813

1,888

2,079

2,086

1,957

2,109

2,137

Rural Rental Assistance Program

479

902

979

954

905

837

1,110

1,088

1,390

Home Investment Partnerships Program (HOME)

1,647

1,911

1,857

1,485

1,208

919

1,023

848

961

Indian Housing Block Grants

556

1,149

762

663

691

627

665

653

670

Water and Waste Disposal for Rural Communities

685

1,370

1,443

648

583

524

685

604

622

Supportive Housing for the Elderly

778

800

580

509

1,056

389

362

456

437

Housing Opportunities for Persons with AIDS (HOPWA)

310

318

314

352

352

302

349

290

342

Supportive Housing for Persons with Disabilities

256

284

216

149

243

102

209

207

189

Public Works and Economic Development

170

285

149

115

129

0

133

101

111

Grants to States for Low-Income Housing in Lieu of Low-Income Housing Credit Allocations

0

2,465

3,083

160

0

0

0

0

0

Single-Family Rural Housing Loans

178

279

277

0

0

0

0

0

0

Neighborhood Stabilization Program-1

0

3,920

1,980

969

0

0

0

0

0

Tax Credit Assistance Program

0

2,250

0

0

0

0

0

0

0

Total Housing

39,692

60,049

51,831

46,186

43,965

41,426

45,140

44,584

46,320

Education

Federal Pell Grants

18,000

26,019

32,905

41,458

34,308

31,887

29,808

28,153

29,106

Education for the Disadvantaged—Grants to Local Educational Agencies (Title I-A)

13,352

21,495

14,526

14,472

14,490

13,757

14,383

14,410

14,893

Improving Teacher Quality State Grants

2,946

2,687

2,955

2,460

2,450

2,334

2,341

2,370

2,325

21st Century Community Learning Centers

1,082

1,127

1,166

1,157

1,150

1,091

1,146

1,149

1,163

Federal Work-Study

989

1,156

995

986

986

934

978

990

990

Federal TRIO Programs

885

905

910

883

840

796

838

840

900

Indian Education

684

699

784

753

803

766

747

808

835

Higher Education—Institutional Aid and Developing Institutions

755

801

764

833

816

780

792

777

818

Federal Supplemental Educational Opportunity Grant

759

760

759

740

738

698

736

733

733

Adult Basic Education Grants to States

569

585

641

607

606

576

575

593

597

Title I Migrant Education Program

380

395

395

394

393

373

375

375

364

Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP)

303

313

323

303

302

286

302

302

323

Pre-School Development Grants

0

0

0

497

133

370

250

250

253

Rural Education Achievement Program

172

174

175

175

179

170

170

170

176

Mathematics and Science Partnerships

182

176

180

179

148

141

150

152

153

Indian Education Grants to Local Educational Agencies

0

0

104

104

106

100

100

100

100

Reading First and Early Reading First

560

129

0

0

0

0

0

0

0

College Access Challenge Grants

0

0

145

150

128

0

0

0

0

Academic Competitiveness and Smart Grant Program

297

690

918

350

0

0

0

0

0

Education for Homeless Children and Youth

0

135

0

0

0

0

0

0

0

Total Education

41,915

58,246

58,645

66,501

58,576

55,059

53,691

52,172

53,729

Social Services

Head Start

6,877

9,077

8,757

7,559

7,968

7,573

8,105

8,717

9,119

Temporary Assistance for Needy Families (TANF)

9,411

10,594

9,837

8,828

8,913

9,491

9,295

8,729

8,682

Child Care and Development Fund

4,979

7,034

5,083

5,152

5,218

5,140

5,288

5,379

5,712

Foster Care

4,525

4,705

4,603

4,456

4,180

4,133

4,746

4,669

4,815

Child Support Enforcement

4,585

4,719

5,044

4,671

4,179

4,278

4,324

4,347

4,379

Adoption Assistance

2,038

2,324

2,438

2,362

2,296

2,278

2,450

2,473

2,587

Social Services Block Grant

1,700

2,300

1,700

1,700

1,700

1,613

1,577

1,576

1,584

Community Services Block Grant

654

1,692

708

678

677

635

667

674

715

Maternal, Infant, and Early Childhood Home Visiting Program

0

0

100

250

344

378

394

430

391

Legal Services Corporation

351

392

422

406

351

343

368

378

387

Older Americans Act Grants for Supportive Services and Senior Centers

351

361

368

369

367

348

348

348

348

Older Americans Act Family Caregiver Program

153

154

154

154

154

146

145

146

151

Indian Human Services

118

115

118

115

110

100

135

150

145

Chafee Foster Care Independence Program

140

140

140

140

140

140

140

140

140

Guardianship

0

0

0

0

0

0

0

101

120

Emergency Food and Shelter Program

153

300

200

121

120

114

120

120

120

Total Social Services

36,035

43,907

39,672

36,961

36,717

36,710

38,102

38,377

39,395

Employment and Training

Temporary Assistance for Needy Families (TANF)

1,694

1,826

2,682

1,845

1,683

1,579

1,696

2,228

2,216

Job Corps

1,558

1,804

1,713

1,777

1,735

1,718

1,984

1,751

1,552

Workforce Investment Act (WIA) Youth Activities

984

2,218

994

946

902

856

898

906

875

Workforce Investment Act (WIA) Adult Activities

827

1,357

862

766

773

731

766

775

813

Supplemental Nutrition Assistance Program (SNAP)

351

367

344

354

334

368

400

630

427

Community Service Employment for Older Americans

504

708

820

454

448

429

440

384

321

Social Services and Targeted Assistance for Refugees

203

203

203

202

152

198

198

198

222

Foster Grandparents

109

109

111

111

111

105

108

108

108

Total Employment and Training

6,230

8,592

7,729

6,455

6,138

5,984

6,490

6,980

6,534

Energy Assistance

Low-Income Home Energy Assistance Program (LIHEAP)

2,590

5,100

5,100

4,701

3,472

3,255

3,401

3,395

3,372

Weatherization Assistance Program

291

5,240

517

234

126

182

234

255

270

Total Energy Assistance

2,881

10,340

5,617

4,935

3,598

3,437

3,635

3,650

3,642
 

  

  

  

  

  

  

  

  

  

Totals

561,209

707,162

749,725

763,686

724,327

744,082

793,606

847,801

877,526

Source: Prepared by the Congressional Research Service (CRS) from obligations data contained in the U.S. Budget Appendix for each of FY2010-FY2017.

Author Contact Information

[author name scrubbed], Specialist in Social Policy ([email address scrubbed], [phone number scrubbed])
[author name scrubbed], Specialist in Social Policy ([email address scrubbed], [phone number scrubbed])
[author name scrubbed], Specialist in Social Policy ([email address scrubbed], [phone number scrubbed])

Acknowledgments

Clarissa Gregory of CRS's Domestic Social Policy Division provided research assistance for this report. Amber Wilhelm, CRS Visual Information Specialist, produced the graphics in this report.

Footnotes

1.

The rate of inflation used here was the Gross Domestic Product (GDP) price index; the rate of economic growth is the growth in the GDP in nominal terms, because the spending increase was not adjusted for price inflation.
2.

See CRS In Focus IF10399, Overview of the ACA Medicaid Expansion.
3.

The major factors other than the ACA Medicaid expansion affecting health expenditures and Medicaid spending are population growth, changes in the use of health care services, and changes in the prices of health care services. See Office of the Actuary, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, 2016 Actuarial Report on the Financials Outlook for Medicaid, 2016, p. 12.