May 23, 2017

The myth of the exploding safety net

Isaac Shapiro, Center on Budget & Policy Priorities - President Trump’s 2018 budget reportedly includes more than $1 trillion in cuts over the next decade to “mandatory” programs that help struggling families afford basics like food and health care; assist people with disabilities and their families; or supplement the earnings of low-income working families. With that in mind, let’s look at the facts about mandatory programs (those funded outside the annual appropriations process):

Total spending for mandatory federal low-income programs outside health care is only modestly above its average over the past 40 years, measured as a share of gross domestic product. And it’s projected to fall as a share of GDP in the future. Programs that aren’t growing faster than the economy aren’t fueling our long-term fiscal problem.
Low-Income Mandatory Expenditures Outside Health Care Will Fall Below Average of Last 40 Years

To be sure, Medicaid is slated to grow faster than GDP. But that’s due to the aging of the population, which will make more seniors (who have higher health care costs) eligible for Medicaid, and to rising costs throughout the U.S. health care system, which partly reflect medical advances that improve health and save lives but add to costs. In fact, Medicaid costs far less per beneficiary than private health insurance, and its costs are rising more slowly. Thus, Medicaid is actually the health insurance system’s most economical and efficient part.


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